Select Committee on Defence Minutes of Evidence

Dr Lewis

Examination of witnesses (Questions 40-59)



  40. The United Kingdom has long standing agreements with the United States. These are European operations that the United States will not be directly involved in. How do you think those arrangements will be affected?
  (Mr Hoon) I do not believe that they will be in any way.
  (Mr Hatfield) The assets that we have are British. We have an arrangement with the United States which is bilateral and to mutual advantage. Those assets remain ours whether they are to be used for a national operation, a NATO operation or indeed an EU-led operation. We will pass information drawn from those assets into the operation as required. We will also ask NATO for information from their sources or even the United States, but it will be the information that is passed, not the raw intelligence.

  41. Lastly, the Torrejon satellite-tracking facilities, the French facility based in Spain. That is being transferred from the WEU to the EU. Do we see any value in that for the United Kingdom? Is there any cost commitment of it to the United Kingdom? Is it of any use?
  (Mr Hatfield) For military purposes, it is of fairly marginal use. It is a satellite headquarters, an assessment centre, if you like. The satellites it draws information from are commercial type satellites that provide useful information for a number of purposes, but you would not try and run a military operation from it. It is not a replacement for proper military intelligence.
  (Mr Hoon) Most of the imagery that that centre procures is procured commercially. Presumably, if you had enough money, you could go out and get the same imagery for yourself.

  42. Secretary of State, on the question of expenditure, is it not a fact that internal NATO documents which were leaked into the public domain at the beginning of the month showed that only six of NATO's 16 European members are planning real defence spending increases over the next five years and all but one of them are minor players in the Alliance? You may recall the last time we discussed the rapid reaction force that we reminded you what Casper Weinberger had said, namely that it is a mathematical certainty that if we are drawing on the same forces to do something with the EU rapid reaction force that are currently allocated to NATO, unless there is some significant increase in the forces that are available if an EU-led operation is underway, there will be a diminution in NATO's capability to undertake operations in those actions in which it wants to be involved. Are you satisfied that the big players in NATO are going significantly to increase their forces' contributions and the expenditure concerned?
  (Mr Hoon) We do not normally comment on leaked documents. I would invite you to have some doubt, as a member of the British Parliament, about the veracity of those figures because you will have studied very carefully the government's expenditure forecasts on defence. The six countries that you mention in those documents did not include the United Kingdom, whereas you know as a Member of Parliament that there is a very specific commitment to increased defence spending in each of the next three years over and above inflation. There is something wrong with those figures right at the outset. To deal with the substance of your argument, it is something that I have said a number of times already. I could deal with your argument by simply saying that it is not how much the European nations spend on defence; it is what they spend it on. The European nations could so reorganise all of their defence expenditure to satisfy the output test of the Helsinki headline goal and significantly increase their capability to do that particular job, which is to move forces quickly into a crisis. They would be left unhappy and no doubt your counterparts on the relevant parliamentary committees around Europe would be left unhappy because, in order to satisfy that goal, there would be a number of things that they would then omit to do. It is about how they spend the money but at the same time, I repeat, we would also like to see our partners and allies in Europe spending more. It has to be spent on the right things, on the right sort of capabilities. It is about capability and that has always been our emphasis.

  43. It seems to me that what you are saying is that, by efficiency savings, it is possible to undertake the extra commitments that might be involved without any reduction.
  (Mr Hoon) I do not want to mislead you. I am not saying it is about efficiency. It is about making judgments about what kind of military capability countries need, individually, bilaterally, if they work together and as part of international alliances like NATO in order to ensure that they have the right kind of military capability in order to do the jobs that are needed of military forces in the modern world. If we concentrated on that capability issue, we would probably understand each other more.

  44. That is a good general answer but can I ask you to be specific in this way: which particular countries do you anticipate improving over, shall we say, the next five years the strength of their armed forces to the point that, if the EU were engaged in an operation in which NATO did not wish to be involved, there would be no diminution in NATO's capability to engage in the operations in which it does wish to be involved?
  (Mr Hoon) I am not going to participate in a guessing game amongst which particular countries. There is a determined political commitment by the EU countries to satisfy the Helsinki headline goal. To the extent that they are successful in doing that—and you invited me back to discuss this in a number of years' time on a previous occasion—they will not only improve their capabilities and the capabilities of European Union nations collectively where NATO is not engaged; they will also improve NATO and NATO's collective capabilities, which is why it is not in any way a diminution in NATO's ability because, by achieving what we achieve through the Helsinki headline goal, we will be strengthening NATO.

  45. Let me turn to the question that was asked earlier about whether the Prime Minister had succeeded in overcoming the appearance of there being fundamental differences in perception between the United Kingdom and France. You gave us your explanation for the comments that were reported today by the French chief of defence staff—
  (Mr Hoon) I actually gave you his.

  Dr Lewis: and the fact that he had been selectively quoted by the newspaper. Leaving aside the fact that all quotations are almost by definition selective, one quotation that has not been denied is the quotation from Mr Blair reported on 18 March, when he said, "If we do not get involved in European defence, it will happen without Britain. Then those people who really may have an agenda to destroy NATO will have control of it." I think that any logical reading of those words means that there is some other allied state that Mr Blair had in mind as having an agenda to destroy NATO. Would you like to categorically state that it was not France to which Mr Blair was referring?
  (Mr Hoon) I was asked this question in defence questions only the other day and I made it clear then that the Prime Minister was referring to those people as individuals. You know as well as I do that there are individuals around who would seek to undermine NATO.

  46. Some people may find that convincing. I do not. Would you reassure me on this point: are you saying that the French accept that NATO will have the right of first refusal in deciding whether they wish to get involved in any conflict?
  (Mr Hoon) I will give you a flavour of what the French President has said. He said, "European defence is being done and can only be done in complete harmony with NATO. It is a question of two tracks which are complementary and not in competition."

  47. Yes, but that does not entail a right of first refusal. You can have two entirely autonomous bodies which are operating separately but in harmony. The question is: is it the case that the French, despite what is reported in the press today, do accept that NATO should have the right of first refusal?
  (Mr Hoon) I have dealt with this before with the Committee. That is to fundamentally misunderstand the way in which countries work together within alliances. They work together bilaterally. They do not insulate themselves from conversations with partners and allies when a crisis is developing. I know that you are determined to see NATO and the EU in competition and as rivals. Somehow you imagine that it would be possible for a head of state or head of government to say, "I am having a conversation today as a head of state, as a member of NATO, but later on I am going to have a completely different and separate conversation with someone else. I am going to forget what I said in the first conversation as a member of the European Union." It just does not happen like that. What happens in the context of a crisis is that there will be a whole series of conversations taking place between the United Kingdom and the United States, between the United Kingdom and France and also between the United States and France. They do speak to each other. They have regular contacts and international positions are then worked out collectively, through institutions, but crucially through the kinds and ranges of informal contacts that go on day in, day out between governments. In those circumstances, the decision as to who might be responsible ultimately for an operation will be a decision that will be taken with the fullest participation of all of our partners and allies. What we have set out clearly as being where NATO is not engaged means precisely what it says. It means that the EU would only be involved where NATO is not engaged.

  48. And does not wish to be engaged?
  (Mr Hoon) And does not wish to be engaged.

  49. Can you spell out where is it specifically laid down in all the documentation, the treaties, the annexes, the understandings, the presidency reports, that NATO will have this first option of taking part?
  (Mr Hoon) It has been in every single agreement on European defence that an EU operation would only be launched where NATO is not engaged. I know you spend a long time studying the details of the St Ma®lo agreement and I know you have some difficulties with that. If you look in the St Ma®lo agreement, you will see that phrase written down in that agreement between France and the United Kingdom.
  (Mr Hatfield) The EU might be operating in areas where NATO does not have a remit, outside Europe.
Mr Hancock

  50. You have said a number of times this afternoon, and you have made great play of it, that it is not how much they spend; it is what they spend it on. When it comes to what they spend it on, how much of that do you think is going to be spent on buying from European defence industries? How do you think what is going on at the moment and the ambitions for certain states to potentialise their contribution to it is actually going to be beneficial to the European defence industries, or are they simply going to be buying everything off the shelf from the United States?
  (Mr Hoon) It depends what kind of equipment we are discussing. There is no doubt that at the high end—stealthy aircraft is one illustration that we have touched on already—the developed technology tends to be American. At the more basic equipment end, there are a range of European suppliers who would be able to satisfy the requirements. I am afraid your question is so open ended that it is difficult to be specific.

  51. Do you think that European defence industries are working closely enough together to ensure that they are not going to get left behind? Are you sure that what is trying to be achieved in achieving the five headline goals fairly quickly is not going to suggest that they cannot keep up with the pace of the re-equipping that will be necessary and it simply means that we will turn, as always, more and more often to the United States to buy from?
  (Mr Hoon) I am sorry to repeat myself but again it does really depend on the kind of equipment that we are discussing. Building a ro-ro ferry, for example, does not involve enormous sophistication in terms of the technology that is required. There are a number of companies not only in Europe but in the United Kingdom that could satisfy that obligation in a technical sense. That is vital to the ability to move people and equipment quickly and effectively. Equally, as I have indicated, there are some areas of stealth technology where we would have to go to the United States. As far as the Joint Strike Fighter project is concerned, there are some areas of the technology that will be incorporated into that aircraft where the United States has to come not only to Europe but to the United Kingdom because they do not have that particular kind of technology that they want to develop. What your question demonstrates is that it depends on the sophistication of the equipment that we are discussing but also it does demonstrate that globally defence industries are becoming ever more integrated. I do not think there is any doubt about that, but I do not think they are becoming integrated along precise geographic lines. If you are tempting me into suggesting that there should be a European industry as against a US industry, I simply do not believe that that is going to happen. There is a great deal of transatlantic integration both between the United Kingdom and north America as well as between continental Europe and north America.

  52. Do you see any evidence of US markets opening up to European defence manufacturers?
  (Mr Hoon) We signed an agreement towards the end of last year with the United States specifically designed to provide opportunities for British industry and to give it access on an equal basis with industry's access from the United States to our market. I believe that that, together with other agreements that have been reached in Europe, is a very important platform for that kind of process. BAE Systems these days, even leaving aside intergovernmental agreements, believes that it now earns more money in the United States than it does in the United Kingdom. Rolls-Royce has made a very important acquisition in the United States. Our companies are increasingly operating very successfully in the United States.

Mr Cann

  53. Would you not accept that there are only two companies left in America, Lockheed Martin and Boeing?
  (Mr Hoon) I suspect Raytheon might have a view on that.

  54. They are interlocking ownerships. Surely all we are talking about in British industry there is basically components, are we not?
  (Mr Hoon) No. I think we all tend to get a little hypnotised by the big, exciting projects, fast jets, heavy lift aircraft, some very sophisticated ships for our navies, but the procurement of defence equipment goes right down to rowing boats, as a very basic illustration. In those circumstances, it is necessary to look at what point in the chain you are looking at, because, as I have said to the Committee before, I am a customer on behalf of the United Kingdom taxpayer. My job is to get the best value and also the best technology. That might mean, in terms of the technology, that we are at the high end going to be looking at some very sophisticated equipment that perhaps can only be available in one or two places anywhere in the world; but it may also mean, as far as rowing boats are concerned, that I want an array of potential suppliers both in the United Kingdom and in Europe and around the world to give me the best price. Some of this conversation is just too abstract.

Mr Hancock

  55. What we are talking this afternoon is European countries cooperating in the field of defence. How do you and your colleagues in your jobs in the other partnership countries assess European defence industries? How do you assess the role they are going to play in delivering this re-equipping process? I do not see many of them queuing up to buy armoured cars, bullets and guns from the United Kingdom.
  (Mr Hoon) I strongly disagree with you. We have one of the most successful defence industries of any country in the world. We sell our defence equipment and sustain tens of thousands of jobs in the United Kingdom because of that success. We have a range of equipment that really is world beating both in terms of its technology and in terms of its utility. Countries queue up—

  Mr Hancock: Bought by our European colleagues?
  (Mr Hoon) You keep interrupting me.

  Mr Hancock: I think we should stick to the issue of Europe, not worldwide.
  (Mr Hoon) First of all, I am talking about the United Kingdom and the United Kingdom has an extraordinarily successful defence industry. That industry is successful, as I indicated earlier, not only in the United States but all around the world. Wherever I travel in the world, there is very rarely a country that I go to that is not interested in acquiring equipment manufactured in the United Kingdom, either equipment solely manufactured in the United Kingdom or where we manufacture equipment in conjunction with other countries.

  56. Why can we not be successful with our European partners in selling this equipment?
  (Mr Hoon) The answer I am going to give is Eurofighter. The Greeks have just indicated their willingness to buy Eurofighter. I am confident that there will be other countries, both in Europe and beyond, that will find that particular aircraft an extremely exciting addition to their equipment. I am not at all pessimistic. I am slightly surprised at the tone of your question because by implication it appears to be running down British industry and the European defence industry, both of which are extremely successful.

  Mr Hancock: Completely the opposite. Our European allies who badly need equipping are not buying from us.
  (Mr Hoon) I have given you one example already. We will send you a list.

Mr Viggers

  57. One of the greatest fears of the United States is that the European Rapid Reaction force will be built around an independent planning function within the European Military Committee and the European Military Staff. There has been, despite the original statement of principles by the Secretary of State, Madeleine Albright, some decoupling, some duplication and some discrimination in setting up a European Rapid Reaction Force. How realistic are these fears?
  (Mr Hoon) Can I simply disagree with the premise? There has been no decoupling; there has been no duplication. There is nothing that has been agreed that in any way changes the view either of the last administration or frankly the views of the current administration. We have made it quite clear that, as far as operational planning is concerned, that will be a matter that we would assume would be the responsibility of NATO. That has been agreed.

  58. Why is Turkey so concerned?
  (Mr Hoon) Turkey has a slightly different view, not least because they are not a member of the European Union. I came back late last night from Turkey where some of these issues were discussed. Turkey wants to see—and I can perfectly well understand it from their point of view—the same sort of arrangements that they have enjoyed in the WEU available to them as part of this process. There are discussions underway—they have been underway for some time—to try and ensure that Turkey is comfortable with the consultation arrangements that have been extended. I am quietly confident that in time Turkey will recognise that. It is not a problem for the European Union.

  59. From my own experience, it is certainly a problem within Turkey. Can you clarify for us how the relationship works between the Political and Security Committee and the European Military Committee on the one hand and the staff in Mr Solana's office on the other?
  (Mr Hoon) The Political and Security Committee's job will be to make an assessment of how the European Union could respond to a given crisis, a given situation. Part of that job will undoubtedly be to advise on military options and they will have a very small military staff whose job it will be to give advice as to the kinds of options that might be available. Once that moves to operational planning in terms of executing those options, that will be a matter for NATO planners. That is why any operational decision will be taken through the NATO processes which, for obvious reasons, are extremely experienced at that kind of planning.

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