WEDNESDAY 27 NOVEMBER 2002

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Members present:

Mr Bruce George, in the Chair
Mr James Cran
Mr David Crausby
Mr Mike Hancock
Mr Gerald Howarth
Mr Kevan Jones
Patrick Mercer
Syd Rapson
Mr Frank Roy

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RT HON MR GEOFF HOON, a Member of the House, Secretary of State for Defence; AIR MARSHAL ROB WRIGHT AFC, UK Military Representative to NATO; and MR EDWARD OAKDEN, Director, International Security, Foreign and Commonwealth Office, examined.

Chairman

Welcome, Secretary of State. Would you like to make an opening statement?

(Mr Hoon) I would. Can I first introduce Air Marshal Rob Wright and Edward Oakden, who are joining me today. I apologise to the Committee if I have delayed your start. We had a special Cabinet meeting this morning to discuss the Chancellor's pre-Budget statement, which no doubt colleagues will be able to hear for themselves later today. The Prague Summit was a historic two days for NATO. Together with enlargement, major changes were agreed that will give NATO the equipment it needs to meet the new threats of the 21^st century. There is obviously a great deal of work still to do but once implemented, those changes will mean a leaner, more functional command structure; more highly deployable forces with new capabilities; and a wide-ranging programme of modernisation aimed at increasing efficiency and reducing bureaucracy at NATO headquarters. We believe that this will give NATO the ability to conduct operations and to rapidly deploy highly capable forces wherever they are needed. The new capabilities package - the Prague Capabilities Commitment - has the potential to deliver real improvement across the range of capabilities, especially in identified, key shortfall areas. Our responsibility now is to ensure that that package is implemented. The Prague Capabilities Commitment gives Europeans and Canadians a good opportunity to start narrowing the growing capability gap with the United States. We will also be looking to newly invited members to contribute, perhaps through the provision of key niche capabilities, though it is fair to say that some countries are already doing that. The new NATO Response Force will enable the Alliance to deploy a joint force quickly to wherever it is needed. It will significantly enhance the Alliance's interoperability, act as a focus for capability improvement, and be a further stimulus to completing the reform of NATO's command and force structures. It is also an opportunity for European allies to demonstrate to the United States that they are serious about NATO having the forces and capabilities to act swiftly, right across the spectrum of missions and in the face of any threat. A root and branch review of the command structure will provide the streamlined framework within which new capabilities and the NRF will be deployed. The agreement announced at Prague will mean a revised, streamlined command structure which will be more flexible and responsive, and based on functional and deployable need. NATO has further strengthened European security through enlargement, bringing in more like-minded nations that have demonstrated their willingness to stand by the NATO allies, whether it involves defending against international terrorism or participating in NATO operations. All these countries have made good progress but still have more to do over the next 18 months to prepare themselves fully for Alliance membership. The United Kingdom will continue to help them. The need for collective defence has never been greater and the new members will make an important contribution. NATO's future success will depend not only on its own military capabilities and structures, but also on its ability to work closely with as many partners as it can. Hence NATO's decision to enhance its partnerships with the countries to NATO's east and south, with a strong emphasis on refocusing partnership to tackle new threats. We recognise that the only way to defeat asymmetric threats like international terrorism is by operating on a united front with as many like-minded countries as possible, whether they are already NATO members or not. NATO's greatly improved relationship with Russia, for example, demonstrates this very clearly. Changes to NATO's capabilities, roles and structures need to dovetail with the European Security and Defence Policy. I firmly believe that what is good for NATO is also good for the European Union, and vice versa. These are complementary, not competing organisations because they are both aimed at improving European military capabilities. Finally, I should return to the recognised need for serious internal adaptation to maintain the efficiency and effectiveness of NATO. Prague has delivered a substantial package of reform which we now need to see through. In short therefore the scale of the changes agreed at the Prague Summit clearly demonstrates the health and vitality of NATO. Implementation will now be the challenge, with the next Summit only a matter of 18 months away. By then it will be crucial that the commitments made at Prague are delivering real results.

Thank you. We visited all of the serious applicant countries a few months ago, and the MOD's response to our report was unusually complementary. Our views were almost congruent on everything we had said with the Ministry of Defence's own view. Can you tell us the extent to which you believe NATO to be militarily stronger as a result of the seven new states who will be joining. Perhaps you can then tell us whether you think NATO is stronger in other areas, politically perhaps, as a result of Prague.

(Mr Hoon) The obvious expansion of NATO's geographical coverage provides greater security. One of the practical lessons we learned during the Afghanistan operations was the need to have more bases, more access, more support from even beyond existing NATO members, therefore new members constantly enhance the security of the Alliance in that very practical way. One of the benefits of NATO membership that is perhaps too often overlooked - and again, we saw in Afghanistan and continue to see as far as ISAF is concerned, is better interoperability, learning together to be able to co-operate in often very difficult situations, having standardised equipment and a standardised approach. The more that standardisation spreads across the Alliance and into the new member states, there are clear benefits to the security of the Alliance. In one significant respect - and I think this is a crucial question for the Alliance - how does a very small country joining the Alliance help protect the United kingdom? It is obvious how the United Kingdom might protect a smaller joining nation, but it is perhaps less obvious to people here how the reverse might be the case. That is why the emphasis that I have mentioned already on the development of specialised commitments can add enormously to our overall range of capabilities. Perhaps historically we rather tended to concentrate on providing or attempting to provide a full range of capabilities. Instead, now the emphasis is very strongly on specialisation, on even a smaller nation being able to provide a niche capability that actually, in terms of multinational deployment, may be absolutely vital, and may well be an area of capability that even a country as powerful and with as comprehensive a range of military capabilities as the United States might well welcome in terms of a particular deployment. In those ways NATO is strengthened by the expansion that we have just seen.

When we visited the seven countries, we found very prominent within each of the defence ministries very competent and quite influential personnel from your own Department doing a wide range of tasks, and all were lauded by the people they were working together with. Now, after Prague, they have a difficult task, a lot of demands placed upon them. Are we going to pull the plug out of this assistance? Will it be maintained at the present level? Will it be increased? Who pays for their being seconded to defence ministries? If defence diplomacy is to work, and it is, then I hope you will tell us very positively, Secretary of State, that this excellent piece of British assistance to these countries will be maintained and hopefully, if necessary, increased.

(Mr Hoon) I am certainly very grateful for your observations and for those of the Committee, because it is something that I am proud of, and I think it is something that demonstrates the excellence of the work done in the Ministry of Defence, because the reason why people are so welcome in a number of different countries is that, of course, they reflect the very considerable abilities that we have in the Ministry of Defence to develop policy and to execute that policy - and this is very often something that is particularly interesting to countries about to join NATO - as well as to organise the department in a way that makes sense. I very strongly believe that the Ministry of Defence is the most joined-up of government departments, having both the makers of policy and the executors of policy working alongside. Indeed, very often it is extremely difficult to distinguish whether those people are from a military or a Civil Service background, and I think that is enormously to the credit and strength of the Ministry of Defence. Therefore, when individuals go to other countries, part of what we are looking for is for them to have the ability to influence and develop the policy or the structured organisation of a ministry of defence at the very highest level, and that seems to be the case, largely because actually, my counterparts, other ministers, permanent secretaries, chiefs of staff, recognise that what they are getting from the United Kingdom is something that is so important and so useful that they do not want to see it wasted at lower levels in their administration. So I assure you that we will continue to support this. We have already had requests for more support. I think, generally speaking, the problem I face is trying to satisfy the demand for such people in a number of different countries, and I assure you and I assure the Committee that we shall go on providing that assistance so long as we can afford it and so long as we have the individuals and, of course, the wish on the part of the host nations to continue this work.

Can you drop us a note in due course about the continuation on an individual basis, as you have been telling us: Latvia, Person X, contract expires X date, to be replaced by X, who is paying the salary, etc? This is one of the finest external activities the Ministry of Defence is doing.

(Mr Hoon) I strongly agree with that, and I do want to emphasize that there will be no lessening in our enthusiasm for this simply because these seven nations have been admitted. But clearly we deal with this on an ad hoc basis. It first of all depends on the country in question wanting to continue the relationship, and we encourage that wherever we can. It also depends on us having individuals who are available and suitable for the particular task in question. One of the things that we have seen as countries have changed their organisational structure is that they perhaps then want someone who is a specialist in terms of financial accounting, so instead of looking at the big picture of how a department operates, they will be concerned specifically with how you ensure budgetary control, how you make sure that the money that is available is reaching where it needs to go. What we find is this is a developing process, and we are providing different skills as countries become more sophisticated.

Mr Roy

The Summit declaration and the Prime Minister allude to the fact that we may not have seen the end of the enlargement process, and 18 months down the line we could be looking at further enlargement, maybe Albania and Macedonia. What are your thoughts with regard to whether NATO should keep enlarging, keep growing bigger and bigger, and if it does, will it not become weak round the edges the more you bring in weaker countries? Is there a territorial concept to NATO with further enlargement? Would that change the whole remit of the organisation?

(Mr Hoon) I think those are very good questions, and I think they go to the heart of NATO and what it does, and those are things that we do have to face up to. Certainly we see the prospect for further enlargement. One of the things that I did whilst I was in Prague was to have meetings with my counterparts from both Albania and Macedonia specifically to emphasize that we did not regard this as an end to the process of enlargement, that we wanted to see continuing reform there to allow both of those countries to become members in due course. That really is our position. We do see the benefits of enlargement. We do see the importance of the partnership arrangements that I have described perhaps maturing into membership in the way that the membership action plans have worked for those who have recently been offered the prospect of membership. But I think we do then have to reconcile the issues that you have set out, which is on the one hand, if NATO continues to expand and becomes ever larger, does that potentially threaten its coherence as a military alliance? I think there is a tension there that we have got to face up to that NATO is a special military alliance, and it should have particular military capabilities. We do not want to see it simply turning into yet another international organisation. We have plenty of opportunities of debating international matters with our partners in the international community; we do not need NATO to assume that form. We want to preserve its military qualities and characteristics, and although no-one has sought precisely to define geographical limitations, it would seem to me that we might be guilty of breaching the Trades Descriptions Act if we went too far beyond the North Atlantic area in terms of our responsibilities. So I am not going to precisely define it, but I think it is something that perhaps we know when we see it.

Mr Jones

The other day Eduard Shevardnadze in Georgia was saying that he thought joining NATO might be an aim in the future. Although you say there are not geographical borders being drawn up yet, would you see, for example, the possibility of states like Georgia coming into NATO?

(Mr Hoon) I do not think it is right at this stage to make commentaries on individual countries in that way, but I certainly see no reason why we should not have a broad definition of what is Europe, and moreover why we should be seeking to exclude countries who have had very good partnership arrangements with NATO already. So I certainly would not rule that out.

Mr Hancock

Secretary of State, what do you now think is more relevant to the prospects for getting the capability gap improved at this time than we have had previously?

(Mr Hoon) I think that is a good question, because I asked that question myself at a meeting of defence ministers in Prague in the sense that everyone was enthusiastic about the DCI and its prospects for improving NATO's capabilities at the time that was agreed - I think it was at the Washington Summit - yet it has not delivered as much as we might have wanted. It has delivered some capability improvements but certainly not all of them. I think we have learned lessons though from the DCI in terms of shaping the Prague Capabilities Commitment, not least that it is not as comprehensive. Instead of trying to provide the 57 varieties - I think it is actually 59 varieties - of capability improvements, we are concentrating on a smaller number, a smaller, more important area of capability improvement. Equally, we are making individual states much more responsible for the commitments that they enter into. So it should not be as possible as perhaps it was for individual states to take a step back when asked to volunteer for particular improvements. But in the end - and this is what I said to my fellow defence ministers - it will depend not simply on defence ministers being willing to see capability improvements; it will be something that has to engage the whole of government. Whilst we had heads of state and heads of government present at Prague, it is important that they also maintain the commitments that their government has entered into, and not leave it simply to defence ministries to struggle, often with inadequate budgets, in order to deliver those improvements.

If that is the case, why is it not apparent that some targets have been set for these capabilities to be brought up to scratch? No real interim stage benchmarks have been established, I understand. Has the capability audit that was carried out on the aspiring and existing NATO countries now been put into such shape that it can be made available to this Committee, for example?

(Mr Hoon) Target dates have been established. The difficulty in terms of benchmarking, if I have understood your question correctly, is obviously that you either have the capability or you do not, and clearly we have seen a number of countries entering into specific commitments - we ourselves have done so - and we want to see those delivered, but frankly, you are either going to deliver that military capability or you are not.

Where do you stand on putting these countries behind the right marker to say, "If you do not deliver, we will take some sort of action"? Is action to be taken against them if they do not fulfil their commitments? What are you going to do to make them put their money where their mouth is?

(Mr Hoon) I think that is central to the difficulty which an international organisation like NATO has. If I may say so with respect, we need to think through the implications of that in terms of national sovereignty, for example, because in the end this is an alliance of sovereign nations, and each nation has its own difficulties to balance commitments in defence as against domestic priorities. That is true of the United Kingdom, and it is true of any other member of the Alliance. Ultimately, it will depend on peer pressure, on other countries who are prepared to make that extra spending and enter into those commitments being able to persuade their fellow Alliance members that they should do the same. I accept that this is the inherent weakness of any international organisation made up of those kinds of sovereign states. If you are suggesting that there should be some overriding constitutional arrangements, then I think that would go far beyond anything that sovereign nations today are prepared to enter into.

Will it not turn into a two-tier NATO? There will be the NATO members who are there because it is a good political club to belong to, and there will be the NATO members who can actually deliver the punch when it is required. The thing that worries me is that some of the people who only have the political commitment will have the right to veto what the ones who will have to deliver the punch will be able to do.

(Mr Hoon) That is why it is important to look at the capability requirements in the round. One of the changes, as I indicated earlier, that has occurred since the DCI is the recognition that we need to make an overall assessment of what NATO needs as an alliance as against perhaps the individual political priorities of particular member states but I think I made the point in relation to Frank's question earlier that there are these kinds of tensions as NATO expands and enlarges, but our policy and priority is to keep NATO as an effective military alliance. If we fail to do that, we will have failed in an important plank of our policy, because NATO will then be more influenced by those who are not perhaps prepared to make effective military contributions. All I would say to you is that you should not underestimate the significance of a political commitment to take action. I am less worried in the context of your question by those countries who are at least prepared to enter into the political commitment to take action, even if they themselves are not as well equipped to do it. I obviously would prefer that they were both politically prepared and militarily prepared. Nevertheless, providing that there is no inertia in the system, I think the political commitment is equally important.

Were you satisfied as our Secretary of State and a significant player in the NATO family to the commitment to increase capabilities of the three countries who were allowed to join in the previous enlargement?

(Mr Hoon) Certainly one of them, Hungary, has publicly conceded that they have not done as much as they might have done in terms of delivering their commitments, but one of the frustrations undoubtedly of multinational, international organisations is that different countries have different economic cycles, they are able to commit to different projects in different timescales, there will be fortunately in democratic societies elections, different parties coming to government with different policies. Trying to coordinate all of those different steps in a coherent whole is extraordinarily difficult, and I think actually we should concentrate on how successful we have been in keeping the Alliance moving in the direction that I have described rather than perhaps warning of the problems. There clearly are problems, but they are not insurmountable, and frankly, the success of the Alliance is that by and large, we have been able to overcome them.

Syd Rapson

You have mentioned in your opening statement that the capabilities gap will narrow by specialisation and some sort of niche capability. Could I press you on how the Prague commitment would allow member states to have interoperability more secure between each member state and the US in particular, which is getting increasingly difficult? It seems that interoperability works against specialisation and niche capabilities. Could you clear that up for us?

(Mr Hoon) I do not think it does, but I can see how it might. The whole point of trying to identify shortfalls and how an alliance like NATO resolves them is that they first of all need to be coherent. We need to be able to bring together the various capabilities in order that they can work successfully. Some of the key gaps that we have identified are certainly in the areas of communication, and secure communication in particular. I have made the point before - I do not know if I have made it to the Committee but certainly to the House - about my concern about the United States in particular investing in new technology in a way that means that, whilst US forces are internally interoperable, they are not necessarily with their partners and allies, and might not be on an active deployment. That is why we put so much emphasis in the new chapter work on ensuring that we make a significant investment in this area of digitising our armed forces. That is going to be a challenge for the Alliance as a whole, but in terms of designing niche capabilities, they will have to be designed in order to fit in with the overall framework. That seems to me to be ultimately easier than leaving a particular country to say "Actually, we would rather like to develop this particular kind of capability, and we will spend whatever money it takes," and then hope that that fits in with the overall scheme of things. It will have to be a top-down description of the framework, and member states will then have to subscribe to certain standards in the way in which they satisfy their commitments obligation. But again, you are right to point out the potential difficulty, but actually the deployment in Afghanistan, for example, demonstrated that common standards of training, common specifications on equipment have allowed a significant level of interoperability already, and we need to go on developing that.

Could I stress the strategic lift capability, which I see in some danger as the German parliament failed to ratify the A400M project? What is being done to ensure that that is not scuppered by this unfortunate German lack of enthusiasm?

(Mr Hoon) I gave an answer to the question from Mike about the kind of difficulties that arise in relation to these multinational projects. Elections, changes of policy, changes of economic circumstances are difficult enough within one country; when they are multiplied across a number of countries, that inevitably causes rifts. If I can say, Syd, that I am more confident about A400M's future than I have been for some time, that we have been given real undertakings by the German Government that they will go ahead, and in those circumstances, I feel confident that that strategic lift issue will be addressed.

They will still be driving this project forward?

(Mr Hoon) They are absolutely committed to ensuring that A400M is delivered, yes.

Chairman

Which do the RAF want: the A400M or the C-17s?

(Mr Hoon) The RAF is very pleased, as am I, with the C-17s, but equally are looking forward to the delivery of A400M.

Mr Jones

May I raise something in terms of the technology gap? There has been a lot written about the potential technology gap between the European defence industries and the US. Do you think that NATO should have a role in trying to encourage more specialisation between the various countries in Europe in terms of trying to not plug that gap, but ensure that research goes further in terms of ensuring that the European defence industry can not just compete with the United States, but actually is not wasting money in trying to compete with things that are produced by the United States, and perhaps give some type of opportunity to the United States defence industry to have a relationship with certain defence companies or countries developing certain products rather than trying to emulate what has happened in the United States, which just from a budget point of view the European defence industries are never going to be able to compete?

(Mr Hoon) That is something that I think all secretaries of state, not only for defence, but also for trade and industry, for example, would have to grapple with. All I can say is that it is a perfectly proper observation. I am not going to specifically be able to answer it, because I think it will depend on particular circumstances. All I would invite you to consider - and it follows on from the Chairman's question - is whether you would apply that, for example, to heavy lift aircraft. Would you say that because the C-17 was there, a very successful aircraft, being produced specifically in the first place for the United States Air Force, we should as European nations have abandoned our ability to develop a heavy lift aircraft of our own? It is a perfectly proper argument, but I am afraid the generality needs to be put into a specific context. There will clearly be areas where we are unable to compete with US industry where we do buy directly from US suppliers. Equally, I think it is vitally important for our own technological base and for our own manufacturing industry that we also seek to identify those areas where we are capable of competing. It is unlikely with large-scale projects that that will be the United Kingdom on its own; it will have to be the United Kingdom working with partners. Some of those industrial partners may well be American; they may equally be European. But I am not sure that there is a "one size fits all" answer to your question, because I think you have to ask whether this is an area where UK or Europe would want to abandon any effort to develop capability, given that it is likely that the United States will be able to supply that equipment, and I think you have to be pragmatic and look at those areas where we have some strengths and we have some capability as against those where we do not.

Do you think NATO has a role in trying to encourage various European partners to actually cooperate in developing not heavy lift, but other areas?

(Mr Hoon) I think the idea of identifying those shortfalls that we require to fill does lead to some assessment of who might and how we might do that, because it may well be that the answer is NATO may say to the United Kingdom, "Please supply this particular capability." It may say to a group of nations that they collectively should procure heavy lift aircraft, for example. On the other hand, I think one of the things that NATO can achieve that individual nations are not able to do on their own is the kind of solution that AWACS provides, where those countries like the UK that already have such aircraft are excluded, but on a subscription basis even a country with a relatively modest defence budget can participate in the development of that capability by paying an annual cost. So I think that there are various ways of resolving the problem, which again leads me to the pragmatic end of the answer rather than anything I think gives you a comprehensive solution to the problem.

Chairman

I know it is not strictly Prague, but we do not get to see you all that often. Further to what Kevan said and I said, I think most people, if not all, on this Committee would be delighted if the A400M is adopted. Our only concern is at what stage will you have to say we really need the process to start cranking out aircraft, because the RAF cannot wait indefinitely? We said in a report we produced six months ago that if the A400M is not deliverable, maybe Plan B should be activated. Are we anywhere near that, bearing in mind this increasing commitment we have to out-of-area activities? How long can we carry on with delayed C-130Js and leased C-17s? Are we anywhere near that crisis point where we might say, as the Government has done in the past, "Enough is enough"?

(Mr Hoon) We are certainly not near any crisis point. I accept that I would need to make a judgement if I felt that there was a real prospect of A400M not being delivered, but that is not the position. In fact, as I said in answer to Syd's question earlier, I am more confident now than perhaps I have been in the very recent past that A400M will be constructed and will be delivered.

Mr Cran

Secretary of State, you said very properly in your statement, and I quote, "We will also be looking to newly invited members to contribute perhaps through providing key niche capabilities." Would it be fair for the Committee to deduce from that that it is your view that the capability shortfall is a problem for most of the other countries rather than the United Kingdom and perhaps one or two others?

(Mr Hoon) Even the United States does not have at any given time all of the capabilities that it requires to do the A-Z of military activity, and I do not say that because they would not be able ultimately to generate such capabilities; it is simply that whenever there is a requirement for capabilities, it comes with a time line, and it may well be that that particular capability is doing something else, or it may not be available in sufficient numbers given the needs of that particular operation. We have discussed before that the United States made very detailed requests of the United Kingdom in the aftermath of the events of 11 September because it was familiar with the capabilities that we had on offer, but frankly, we had capabilities that were - I will not say lacking, but were short at the particular time as far as the Americans were concerned. So I do not think this emphasis on niche capability should be taken as suggesting that somehow any one country - the United States gets closest to it - is necessarily in a position to provide the full range these days, because military operations are ever more demanding, they are relying on ever more sophisticated technology, and I think it will be increasingly the case in fact that countries cannot provide the full range of what might potentially be necessary given the wide range of possible operations, which is why we concluded in the strategic defence review that increasingly operations will be multinational. That is the direction in which we will go, but the advantage that the concept of specialisation brings, as I said earlier, is that the smallest nation may well be capable of making a vital contribution alongside the largest one.

That was a good answer, and it is an answer with which I personally agree, but I think it is an answer to a question that I did not think I asked. What I am seeking is to follow Mike Hancock. Everybody knows that there is quite a differential of spending as between the countries of the NATO alliance, therefore the question is not just at the minute what the other countries can contribute; it is how do we accelerate them contributing more? I am really just seeking from you whether it is in your mind to be understanding of the positions and so on, but to put the accelerator down and say, "Come on," in a limited way.

(Mr Hoon) Certainly I want to see other countries spending more - I can say that absolutely without qualification - but at the same time, other countries also have to spend better, and if you look at the spending levels of NATO countries, you will see, for example, Turkey and Greece very high in the lists, but not necessarily spending their defence budgets in perhaps the way that we might want to see, looked at from the perspective of NATO or the European Union overall.

Chairman

That was put very delicately.

(Mr Hoon) A point that George Robertson used to make - and I think strictly relevant to the idea of a NATO reaction force - is that there are something like 2 million people in uniform in Europe, but how many of those can we actually get into a crisis quickly? A handful, comparatively speaking. So it is about as well - and this is part of the process that Prague was engaged on - about having the right kinds of forces. That means not necessarily spending money on developing ever more infantry people, but actually being able to develop the kinds of capabilities that allow you to get perhaps a smaller number of infantry men into a crisis quickly. That means having a long logistics tail, and being able to support and sustain them when they get there, a very different concept. I would not want you to simply assume that spending more is the answer. It is part of the answer but it is by no means all of the answer, and part of it is spending the money on the kinds of capabilities that we require today as opposed to the ones that we had to fight a potential war against the Soviet Union, which is essentially how still too many countries, and frankly NATO itself is organised.

I would not wish to mislead you. I agree with you. I do not think it is just money either, but it is a key component. Moving on, what commitments did the United Kingdom give at Prague for its capability contribution?

(Air Marshal Wright) If I can add something to your previous question, what has not really come out so far is that the NATO Response Force is the vehicle for attaching some of these capabilities that will enable us to come up with the shorter-term developments that we need. The problem with DCI over the last four years is that it was such a broad front. We now have political developments. We have readily identified specifics, we attach it to the NATO Response Force, and that will be a very significant vehicle that will give us time lines, as again was mentioned earlier, to take forward in the next two or three years. I think it is a very good vehicle to break through. In terms of what the UK is contributing, we, as you know, have been pretty well up the scale on our total commitment in terms of force roles and so on, with a very high percentage of acceptance and so on. We were asked to tackle four specific areas by Lord Robertson: NBC protection, deployable CS and CSS - combat support and combat service support - and we keep talking about the highly technical end of the spectrum, but with bridges, NBC equipment and so on it is equally important to know where the shortfall is. We were asked, and we have committed to producing the deployable CSS to two brigades, the NBC equipment for two, the same, and that is very significant in the context of this NATO Response Force. We are looking at the strategic lift along with other nations that were asked to look at it. There were four requests that we were asked to put forward; secure communication and CIS is the third. We made a very good, I would call it, three and three-quarters attempt. If I may just make one plug, if you look at the NATO force structure work that is undersung over the last two years, the UK has taken a very significant lead with the Allied Rapid Reaction Force in developing and spending on the right equipment in that headquarters in terms of deployability, a very significant commitment, and I think there the UK has taken the lead in setting the new template for deployable mobile headquarters.

(Mr Oakden) There are also new ways in which NATO is now looking at providing this equipment. There is some recognition that in the same way you cannot expect every single nation to provide the whole range of forces, so one way of doing it is for a group of nations to get together and say provide specific air to air refuelling capability, or a specific group to get together and concentrate on heavy lift and so on. So not everyone tries to do it together, but you get sub-groups trying to concentrate on particular areas.

I understand the answer about the British contribution; that is clear and unambiguous, but I still get the very strong impression that it is just a question of "Oh, well, they have contributed what they can," and it is not always very much. I just have a very strong impression attending the European Union Foreign Affairs and Defence Committee yesterday that the representatives of other countries are perfectly happy to get defence on the cheap. Somebody else can come in and pay for it. Yes, of course, they can give niche contributions and so on, but the big players will contribute the big money. Against that background, is this a sensible distribution of labour as between the countries?

(Mr Hoon) I do not think I can properly answer that question. I do not think it would be sensible to try and do so. What I can say is that the idea of specialisation certainly gives those countries who historically might not have been able to make any kind of contribution because they were developing forces, for example, that were simply duplicating the forces or capabilities that are already available to the bigger players, as you put it, to now, if they choose to do so, identify those key shortfalls and make a contribution. The previous Dutch defence minister announced publicly that his priority for defence spending would be to ensure that any Dutch defence spending was geared to satisfying the needs of the headline goal. Again, I think it is an interesting political, constitutional question as to whether, for example, if a British Government took the same line, there would not be those in the United Kingdom who might criticise that as being some breach of sovereignty, as some failure to protect the interests of the United Kingdom as against an international organisation. I would be interested in your views on that, because you might take a different position from the one that I have set out.

I cannot imagine why you take that view at all, but of course, the relationship here is we ask questions and I have one last question to ask. I clearly am not going to get much further with this. Let me just ask a practical question. If we take the NATO Response Force, which of course was discussed at Prague, just let us suppose there is going to be a capability shortfall, and given the experience of the past, it is not unreasonable to suppose that that might happen, and then the emergency comes along. What do we do then?

(Mr Hoon) We do what we have always done, which is that we improvise, but in truth, we can deliver capabilities. The United Kingdom has a very sophisticated ability at short notice to deliver forces almost anywhere in the world. That is the case with a number of other countries, perhaps not as many as we might like, but I think the idea of the reaction force is to concentrate minds so that we are moving in that particular direction, and it does reflect a change in the kind of threats that we are having to deal with. If we had had this conversation 50 years ago, we would have been talking about the need to be able to move infantry forces quickly into the German plain to confront a threat from the Soviet Union. That has gone. You would have been pressing me, saying, "Why can't we train and equip more infantry to conduct that essentially land battle?" We now have to adjust our forces and our capabilities in the light of the kind of strategic threats that we face today, and they are different. But that does not mean that we can simply switch off and switch on the old capabilities and the new ones. There is going to be a challenge in order to deliver them, and that is what we are engaged on. I share your impatience, because defence ministers are always impatient about the need to get these kinds of capabilities, but the whole point of establishing targets, establishing multinational elements is to enable other countries to share my impatience, and yours.

I have no other questions, but I would merely make the observation that I suspect what is going to happen - and I am prognosticating - is that these other countries, of course, because they wish to have defence on the cheap will simply say exactly what you have said: "The Brits and one or two others can mobilise very significant forces so we will leave it at that."

(Mr Hoon) Can I just say this? I think that significantly underestimates the determination of other countries to play their part. One of the most difficult experiences I have had as defence minister - and I accept that James is generally and historically right in saying that what happens is that countries have to go round encouraging others to participate - was in persuading other countries at the time of the ISAF deployment that they could not send their infantry forces to Afghanistan, calling colleagues who I suspect had been in the position of having had their prime minister or president announce their deployment to Afghanistan and saying, "Actually, we don't need an infantry battalion. What we actually need is some specialist who can deal with unexploded ordnance or who can repair the runway at Kabul airport." It is that kind of specialisation. I see absolutely no reason why a smaller country cannot provide those sorts of niche capabilities. At the moment too many, I accept, are still trying to provide the infantry battalion, and that is why I say it is about spending better as well as spending more.

Chairman

One question on putting moral pressure on the slackers who outnumber the contributors. There is an annual process in NATO where countries are sent questionnaires, they have to fill them in, say what their capabilities were, what they were going to buy in the future, and a group of NATO personnel give them a bad time. Does that have any effect?

(Mr Hoon) I think what you are talking about, in the modern phrase, is auditing, and I think we need to maintain that pressure. That is part of what I know George is very keen to see. He has been using a great deal of moral pressure in recent times, and I know that he intends to continue that.

(Air Marshal Wright) There is a great pressure now to introduce audit, to use the Secretary of State's words, or an evaluation and certification. If I go back to the NATO force structure, for the first time NATO formed a team that went out to the headquarters with a list of over 400 requirements, and you had to pass the 400 requirements in an operational scenario, an exercise, before you were certified for use as a NATO force. This policy is going to be implemented all the way through NATO's front line, including the NATO Response Force, so there is that sort of dynamism being developed. That is not peer pressure; that is pass or fail, and the results of failing are self-evident.

They should publish the failures on the Internet.

(Air Marshal Wright) That is a possibility. The European nations, because of this peer pressure with the headquarters they put forward, have spent something like _2 billion developing the proper capabilities. It is the intent to apply this pressure - and it is a certified, evaluated pressure - all the way through the NATO Response Force, so hopefully we will gradually get to a much firmer, no-hollow structured system as we take our capabilities forward.

Mr Howarth

Is there a sub-committee of NATO which is analysing the particular specialisations that each individual nation claims to be able to contribute and trying to bring all those together, and if so, what is it called?

(Air Marshal Wright) It is the Defence Requirements Review process. It starts with your level of ambition, an assessment of the scenarios which NATO may have to fight, an assessment of the forces required to undertake that level of ambition, an allocation in dialogue with nations of force goals, an acceptance by nations of those force goals, and then, with the DPQ, the Defence Plan Questionnaire, every year we assess how that has moved forward. This is quite tough peer pressure in committees like this. Budgets and all the rest of it over the last few years have resulted in DCI and PCC and it has not been wholly successful, but there is a very coherent structure all the way through NATO to produce results. The bottom line has been, I suspect, budgets. There is a system. It is being revitalised and modernised at the moment to reduce bureaucracy, and a very important thing that NATO has started now is to go back over what I call legacy capabilities, legacy capability packages that were geared some years ago to the Cold War scenarios, and we are trying to remove them so that we can look ahead to what we need as opposed to implementing old concepts.

I presume preparatory work has been done on the new members.

(Air Marshal Wright) Indeed, through the membership action plan.

When we went to Bulgaria, they were very keen to show us their significant contribution of a marvellous contraption which produces hot showers. I understand that it was extremely welcome out in Afghanistan - not to be underestimated as a contribution.

(Mr Hoon) Exactly. That is a very good example of the kinds of things we are talking about. It is something that was enormously welcome and enormously useful, and not something that was at the high end of the technological spectrum.

Mr Crausby

Still on capability shortfall, and accepting that every nation cannot deliver everything, nor perhaps should they, can you tell us which areas of capability shortfall are the most serious and the most difficult to fill?

(Mr Hoon) I think we have touched on a number of them already, and we have debated strategic heavy lift both this time and previously. This is part of the answer to the point about what would you do if you lacked this requirement. Countries do have lift, but they do not have lift of the size and shape required in the modern world to move forces quickly. You can charter ships, you can charter aircraft, but it takes time and it is not always reliable. What I would invite you to think about is not just whether that capability is there, whether you have a C-17 sitting there on a runway. That is the ideal arrangement but you have also got to ask "How quickly do we need those forces into this situation? Do we need them tomorrow, next week, or will next year be enough?" There is a matrix there of capabilities and time lines. It is about understanding that matrix and about having the readiness of your forces and the equipment that they need at the right time. So heavy lift is part of it, secure communications, suppression of enemy air defence. I could go on. There are a range of important capabilities that we lack, but again, often that we lack in sufficient number and of sufficient quality to interact in particular with the United States, or that we lack in terms of timescale, having them available in a reasonable time frame to do a particular job. It is not quite as simple as saying there is a list and we tick tem off when they are available. It is about making sure that they are available in certain timescales.

You said in your opening statement that what is good for NATO is good for the European Union. That is obviously true. Inevitably, there will be tensions between the sovereign states. What role does the UK have to play as a bridge between the United States and Europe; for instance, the European commitment to achieve precision guided missiles alongside America's prohibition to export what they consider to be the more sophisticated armaments? What can the UK do to ease that tension?

(Mr Hoon) The UK has consistently put its emphasis on developing more effective military capabilities, which is why I say that the European Defence Process, the Prague commitments and even the DCI before that were entirely complementary. They were all designed to improve military capabilities. However, as one goes about achieving that, if at the end of the day, European nations have more and more effective military capabilities, I am entirely relaxed about how that is achieved. One reason why the UK supported the idea of European defence is that if we believed, as we did, that the political pressure within the European Union could bring about an improvement in military capability that hitherto had not been successful elsewhere, we were pragmatic about employing that means as a way of improving capability. I do not think that there is any incoherence in that nor any difficulty between, say, NATO and the European Union if one focuses on the goal of improving military capability.

I have a specific question on Astor, which is due to enter service in 2005. Lord Robertson identified two ground surveillance capability gaps. That is coming in in 2005. What is the Secretary-General saying is not provided by Astor?

(Mr Hoon) We are ahead of the game in providing a national contribution to what is a NATO requirement. We are spending around £1 million on Astor at a time when NATO is still developing and designing its own requirement. I do not know that "bridge" is quite the right analogy, but as we are embedded in the NATO process, our objective will be to ensure that the NATO design requirement is consistent with what we are working on for ourselves. Therefore, we shall be able to make a significant contribution to the overall NATO picture. It will require more effort by other NATO countries to emulate the efforts that we are making.

Syd Rapson

Would Astor be interoperable with other nations, if we use our national facility for the benefit of all?

(Mr Hoon) That is what I was trying to say.

Will there be a problem with other countries plugging into Astor?

(Mr Hoon) No. We are ahead of the game on this as far as our partners are concerned. We have to ensure that whatever specification is developed in NATO it is a specification that works as far as we are concerned. I am reasonably confident that we shall be able to do that simply because we are leading the way. I have the Royal Air Force here who will be able to satisfy you entirely, I am sure.

Five nations are working on their national AGS systems. They are all different. Some use helicopters; they all use ground stations; and some use jets, as we shall. NATO requires its own core-owned operated capability to provide a minimum immediate response. That design is being developed at the moment. In terms of interoperability NATO gets its core capability by 2010, rather like the AWACS. The other nations will contribute and the totality of that contribution will give the overall requirement for the scenarios that I have talked about. There is a programme called CAESAR and, like all things in NATO, I cannot remember what the acronym stands for. However, there is a NATO programme that ensures interoperability so that at the ground station one can interpret pictures from the different systems.

Chairman

It may be helpful if we have a briefing on Astor. Maybe you could pull that into the briefing that we were promised four years ago, but never received, about why the company that did the contract actually won it. Perhaps we could enter negotiations with the Secretary of State for that debriefing. I am sure that by now your department has successfully debriefed the unsuccessful applicants. If you have done that perhaps you can tell us about the Astor programme. Obviously, it is very important.

(Mr Hoon) We can do that.

It was not on your watch, but a long time before.

(Mr Hoon) I was doing the calculation.

Mr Howarth

"Watch keeper" is on your watch.

(Mr Hoon) Yes, "Watch keeper" is on my watch.

Secretary of State, mention has already been made of the NATO response, one of the key items that came out of the Prague summit. I understand that its initial operational capability is to be available by October 2004 with full operational capability not later than October 2006. It is a 20,000-strong force and it is designed to be ready to deploy at seven days' notice. What kind of tasks is the Response Force designed for?

(Mr Hoon) The kinds of tasks that we would expect our own spearhead forces to be engaged in: it is rapidly deployable; perhaps engaged in medium-scale war fighting operations; perhaps engaged in extraction operations, which are an increasingly regular feature of what we ask people to do; and it will be very much a sharp-end, war-fighting force should that prove necessary.

How does it differ from the previous NATO response forces, the ACE mobile force and the ARRC?

(Mr Hoon) This is the force that would be deployed to do the job and much more than the framework support structure that you are describing. These would be forces that would deploy into a theatre, into a crisis, and if necessary they would fight.

Will they replace the ACE mobile force and the ARRC?

(Mr Hoon) No. The idea is that they will be the front end, if you like; they will be the force that will be available to carry out the actual task on the ground. It is about readiness, about deployability, and about sustaining them at the sharp end.

Is it planned that they will draw on the same assets as the ARRC and the ACE mobile force?

(Mr Hoon) No.

(Air Marshal Wright) The ACE mobile force was very much a legacy organisation, a multi-national organisation, designed to put a footprint on the ground. With all the work that we have done on the NATO force structure - the deployable, flexible, out-of-area concept - we decided that in relation to the headquarters about which I spoke earlier - ARRC is one, but there are eight - nations would put forward to be developed as key mobile headquarters. As I said earlier, ARRC is a template for the way in which we shall operate. It will be one of the C² control elements that will control the response force. The response force is a vehicle for many things, not only capabilities. If one looks at the panoply of what NATO is doing - the command structure and the task force - with one of those land headquarters - ARRC is one - controlling the land, the NATO response force will fit within that, as will the air and maritime elements. It is a total picture, and the whole thing is deployable and capable at the top end of the spectrum if required, and critically at very short notice.

They will be like a 15-hour assault brigade?

(Air Marshal Wright) Indeed.

(Mr Hoon) I think the analogy of our own spearhead approach is the right one: having forces maintained at very high readiness, able to move very quickly.

Has any decision been taken yet about what the force will comprise, what contribution the UK will make and what contribution other nations will make?

(Mr Hoon) We are still working on that. It is the point that James was making earlier - he has gone now - that we want other countries also to be in a position to maintain forces at that level of readiness. That is a very different approach from the one that generally is adopted. The whole concept of having a force available at short notice, with all the logistic support that is required, is something that we want to see other countries being able to do as well as ourselves.

Did you have people sidling up to you saying, "We would like to join you on this one", or was there a sense of a degree of reluctance?

(Mr Hoon) No, I think there is a recognition in other countries that this is something that they have not necessarily tried before and that they will have to reorganise to achieve it. It is exactly the point that I was making earlier about changing concept. If in the past your concept was that you were required to place large numbers of infantry personnel into a particular place, but in a relatively relaxed timescale, you organised the forces in a way to do that. This is a wholly different concept, and, as we have found, a very challenging one. From the perspective of the UK it is important that we do not assume too much responsibility in the first place because we want others to develop a similar kind of capability.

Mr Hancock

It will be difficult for many of those countries to deliver any elements of those kinds of forces at all. Most of them have conscript armies which train for fairly short periods of time and they will not be available for that kind of deployment.

(Mr Hoon) Even if countries have conscript armies, they have quite professional elements alongside them. I accept that there is an issue in those countries that have conscript armies about how much time, effort and resources they devote to conscription as opposed to their professional forces, but they all have very effective professional forces as well.

They are not very large elements.

(Mr Hoon) I disagree with you. I think if you check the numbers you will find that they have significant professional forces as well. France has only recently abandoned conscription and no one suggests that France does not have a highly professional and some very sharp-end forces that would readily satisfy the terms of the NATO response force. Conscription is a bit of a red herring. There are problems with conscription but I do not think that it stops the development of these kinds of professional forces.

Did you sense that there was an agreement among the members of the alliance as to the purpose or usefulness of this force, or did you sense that different countries had different views?

(Mr Hoon) On the contrary, I would say that there was very great enthusiasm. There is a recognition that it is precisely the kind of force required to deal with the kinds of threats that we face today. It is fair to say that the deployment to Sierra Leone, for example, was widely admired by our European partners as being something that they themselves would have liked to be able to do but at that stage, at any rate, probably could not.

Are you confident that the timetable will be met?

(Mr Hoon) Yes, I am. This is quite a modest-sized force. James' question was about spending better rather than spending more, about making sure that you embrace the concept and organise the forces to be able to deliver.

The reality is that we are better placed than any other country to do this because we are already independently structured to deliver such a force, so the burden will fall upon us. The question will arise that if there are two operations, one involving this new NATO force and one involving the EU rapid reaction force, and we have commitments to both, which will take priority?

(Mr Hoon) I have made it clear already that because we are already organised in this way with significant elements of our Armed Forces, it is important to give other countries the opportunity to develop the same kind of approach. I had already answered the question before you asked it.

I think there is a clear message and we welcome that. What relationship do you envisage between this new NATO force and the EU reaction force?

(Mr Hoon) There is a long answer which is that it is about improving military capabilities. The United Kingdom is wholly relaxed about whether that is done in the context of the EU or NATO, providing at the end of the day we get better capabilities. There are also comparisons to be made, as I have said already, at the sharp-end, war-fighting force. The Peterburg tasks are not designed at that level of war-fighting capability, but I see no reason why ultimately they should not be amended in that direction. I see no reason why, when we are concerned with improving capabilities, that that should not be something that the EU should embrace as part of a continuing process to refine Peterburg tasks and to develop this kind of tighter, sharper capability.

If, as we hope, the EU reaction force draws on NATO structures and NATO planning and systems and if the NATO reaction force is called into operation at the same time, do you foresee that being a problem and that that will impose strains and difficulties on NATO?

(Mr Hoon) That is why it is important in developing these kinds of forces that we do not simply have one of them. The ambition in relation to capability improvement is that we have a choice, and that we shall have more than one set of these forces available to be able to do the job. That may be over ambitious - at the moment many countries do not have even one - but we have just discussed the example of deployable headquarters. I suspect five years ago that you may have been asking why the UK was the only country essentially that was making a substantial contribution to a deployable headquarters and now we see other countries prepared to do the same. Gradually the lessons have been learned and the capabilities improved. We want that to happen.

In relation to the reports in today's newspapers about this new Franco-German operation which is going to have integrated command capability, where will that fit into the new arrangements? Is that yet another force that is being created in Europe? Does it fit in with the EU force? Is it additional to it? What will it do in relation to the NATO force?

(Mr Hoon) I do not think that you should get too excited about what is a submission by France and Germany to a committee that is looking at the long-term reform of the treaties governing the European Union. I have met M. Barnier on a couple of occasions lately and I have submitted some ideas on behalf of the United Kingdom. They are ideas about longer-term thinking. I am sure that the Committee would want all countries to engage in that kind of long-term thinking. Certainly the United Kingdom is engaged in that. I would not get to excited at this stage about what are ideas. I am sure that Mr Howarth is not afraid of ideas.

I am not afraid of ideas. The Daily Telegraph says that the Foreign Office is alarmed. I am not sure that your soothing reassurance to the Committee sits with that, but of course the newspaper may conceivably be in the wrong. Are you not concerned that the French and the Germans are separately talking about a combined force, a Franco-German force with its own doctrines and integrated command capability at the same time as the other discussions are taking place. Is that not creating confusion?

(Mr Hoon) These are ideas and I do not think that we should be afraid of ideas. This is a submission to a committee that is looking at the treaties governing the European Union and what they may look like over the next 30 years. I think that we should encourage other countries to have ideas, because out of the process one day we may achieve something practical. As I said, the United Kingdom has submitted our thinking on future developments in the European Union. I hope that my ideas are also received with as much enthusiasm as the Daily Telegraph appears to have received these contributions from France and Germany. It is an important part of the process of developing policy. They are ideas and no more than that at this stage.

Mr Jones

Secretary of State, I want to turn to terrorism. One of the issues at Prague was the endorsement of the military concept of defence against terrorism. When you came before the Committee just after 11 September you emphasised the importance of intelligence in terms of the war against terrorism. Do you share the concerns of Donald Rumsfeld that the West feels that spies from the Soviet era will penetrate institutions in the new NATO member states and thus access to NATO countries' secrets? Do you have concerns that some aspirant countries are possibly not as trustworthy as others and to use the Chairman's phrase, that you would not trust them with a copy of the Daily Telegraph?

(Mr Hoon) Clearly, I do not in any way underestimate the importance of security. The security of what NATO does is absolutely paramount. I know that the Committee has visited a number of countries that are likely to join NATO in due course. Their level of criticism about our engagement, for example, sometimes with the Russian Federation is remarkable, because understandably most of those countries are pretty suspicious of the Russian Federation, given their own recent history. If you go to the Czech Republic, you will not find wild enthusiasm for Russia because of what happened in 1968. The same is true of the Baltic states. I think the idea is a little far fetched, that citizens of those countries, who have had relatively recent experience of the Soviet Union and what it meant for their own people, are likely to become spies on behalf of the Russian Federation. In my view that is just a little unrealistic.

You disagree then?

(Mr Hoon) I am trying to be polite.

Yes?

(Mr Hoon) Yes.

In terms of the war against terrorism, one of the roles identified was the idea of NATO assuming a role in home defence. Can you explain exactly what that means? Is it around Article 5, or is it something else that NATO could assist in homeland defence of member states?

(Mr Hoon) The first thing to say about homeland defence, as far as the United kingdom is concerned, is that the role of the Armed Forces is always in response to a request from the civilian authorities. It seems to me that that principle should apply equally to any request for, say, the use of our military forces in assisting in the internal defence of any other member of the alliance. Clearly, in light of the appalling events of 11 September, it is not difficult to envisage circumstances in which other countries may make such a request particularly if there were devastation on a wide scale. It is important to get the structures right. For me the structure would be that there would have to be a request from the civilian authorities for the use of military assets in the way in which they are used in the United Kingdom in support of the civilian power. We would need to keep that framework clear before engaging in anything along those lines.

Patrick Mercer

I have three brief questions. On chemical and biological warfare, the CBW initiatives were discussed at Prague. What was the British contribution to that?

(Mr Hoon) We can now deploy two brigades with full personnel protective equipment. Between now and 2005 we want to see a significant improvement in our detection capabilities. We are working on that.

Does that imply a change of task in our military forces or enhancement?

(Mr Hoon) It is more enhancement. We are one of the countries to recognise the importance of that early. Prague had an effective display showing how members of the alliance - significantly European members of the alliance - were able to provide equipment for the detection and protection of deployed forces in relation to CBW threats. It is something on which we need to do more, but we have made a significant start.

Can we look forward to the creation of another NBC regiment or two?

(Mr Hoon) That is something we would look at. At the moment we are certainly concerned about improving our ability to detect such a threat and that is our priority for the moment. We have already gone quite a long way in terms of what we can deploy effectively.

How will NATO plug into British CBW research?

(Mr Hoon) Part of the work that is under way is to try - as we have been discussing all along - to ensure that individual national capabilities are plugged into a more coherent process on behalf of NATO. A lot of work has been done in the past 12 months on that. Part of the display in Prague was to demonstrate how that could be achieved. It is fair to say that a great deal more work still remains.

Will Porton Down be made more available for this kind of work?

(Mr Hoon) You say "made available". It is a national facility and should it be necessary we would use its skills and abilities to assist NATO allies, as we already would. I do not see that it is not available.

Several of the newly joined or joining countries of NATO as a result of belonging to the Warsaw Pact in the past have abilities and skills, particularly in offensive CBW, or NBC as I should say more correctly, warfare than other members of NATO. Will we be able to tap into that?

(Mr Hoon) I am not sure that they should any more.

They have had experience of it in the past.

(Mr Hoon) They may have done, but in the quite distant past. I assume that they are signatories of the relevant international conventions.

(Mr Oakden) Looking at it the other way around, the Czechs have a specific medical unit which is good at looking at detecting and treating injuries of that kind.

(Air Marshal Wright) We are more interested in going back to the niche capabilities than the defensive side. Some of these countries have very good capabilities in that respect. That is not passing them off with a smaller task; it is something that is absolutely critical and something NATO is short of. Their previous offensive capability is playing into the defensive role.

When we went to the Baltic states it was clear that there was a level of expertise against a more sophisticated NBC threat than we perceive. However, we are not blind to that possibility.

(Mr Hoon) No.

Moving on to Iraq, on Monday the Prime Minister said that at Prague, "there was strong support for multilateralism and for the decision of President Bush to go through the UN. But equally strong insistence that multilateralism and the UN be seen to work". At Prague was there a discussion on what exactly it means for the UN to be seen to be working and how can the UN assist in that?

(Mr Hoon) There was not the kind of detailed discussion about 1441 that had taken place in the Security Council. There was some brief discussion about the framing of the declaration to which you refer, but Prague was not centrally concerned with debate and discussion about Iraq.

The Prague summit statement on Iraq states that, "NATO allies stand united in their commitment to take effective action to assist and support the efforts of the UN to ensure full and immediate compliance by Iraq ... with UNSCR 1441".

(Mr Hoon) That is what I just said.

Indeed. Was there an agreement in Prague about the meaning of effective action?

(Mr Hoon) No.

Was it investigated at all?

(Mr Hoon) No.

Was it simply not on the agenda?

(Mr Hoon) No. I do not think that I can improve on what I have said already. There was a discussion about the declaration. That was agreed, but the Prague summit was not centrally about Iraq or about repeating what had already been discussed at length in the Security Council in the framing of 1441.

Mr Howarth

Can we turn to missile defence? The Prime Minister did not refer to it in his statement on Monday. Can you tell us what was discussed at Prague on that subject?

(Mr Hoon) Again, I do not recall there being a detailed discussion about missile defence. There has been an agreement by NATO members for a new study to examine options for using missile defence capabilities to defend alliance territory against a full range of current threats. We have been very supportive of the decision by NATO to carry out that work. It is something that we regard as being significant.

Were there any options discussed other than whether we should be in or out of any American system?

(Mr Hoon) As I say, there was not that kind of detailed discussion about missile defence. That is part of some continuing work that NATO has been engaged in for some time. As I indicated in October, we are keen to have the kind of parliamentary and public discussion of these issues as we judge is now necessary.

Chairman

It is a pity that you had not started that three months ago, Secretary of State. It would make for a more useful discussion in the Defence Committee.

(Mr Hoon) I am always grateful for the advice of the Defence Committee, but occasionally I have to take decisions for myself.

When will the debate on missile defence start?

(Mr Hoon) I indicated that I anticipated publishing a discussion document that I hope will be ready in the early part of December. I hope that that will stimulate some discussion.

You will not have any surprises. We shall ask you the same questions that we asked you last time.

(Mr Hoon) I hope that I would give you the same answers.

Chairman: I was worried about that.

Mr Howarth

It would be quite surprising if you gave the same answers because on 12 November you made a very interesting speech to the Foreign Policy Centre. Perhaps I may quote from that: "Let me also make it clear that developing the capacity to defend against the threat of ballistic missile attack is in the interest of the UK and its people, just as much as it is in the interest of the United States". I see that as very welcome. I hope that when you come to publish your paper next month that it will indicate some options. So far all you have said is that we are waiting to hear from the United States with a request to be able to use the various facilities that we have here and possibly to enhance them. In the margins of this debate about Prague perhaps you will share with us some of the discussion that you had with General Kadish last week.

(Mr Hoon) I did not met General Kadish.

Perhaps you could tell us what your department's discussions were, as to whether the United Kingdom will become involved in the development of a missile defence system or whether we are content to leave it to the Americans. Was that the view of the other NATO members or are there NATO members who said, "Yes, we would like to accept your invitation to be part of the programme"?

(Mr Hoon) Those are extremely good questions and I am sure that they will inform the debate that we are about to have.

That is a stonewalling argument, Secretary of State.

(Mr Hoon) If I answer the questions you will say that I am pre-empting the debate. It is important that the Committee have the opportunity, as indeed will other Members of Parliament, to participate in what I think is an important debate. That is why I gave the speech that I gave the other day and why I made the statement that I made in October.

On that specific question that I put to you, at Prague did other NATO members indicate that they were themselves keen - as I understand Italy might be and possibly the Netherlands - to join with the United States in committing funds to participate in the programme of developing the technology to deal with missile attack?

(Mr Hoon) There was no specific discussion about the commitment of funds. Clearly, that is a matter for individual nations to decide. I think I mentioned in the Statement that I made to the House that there has been a briefing by the United States of NATO allies in recent months about the US thinking in this area. That has clearly stimulated a debate here and in other countries. It is too soon to say what other countries will decide. It is important that the United Kingdom engages in that debate and reaches some early conclusions.

Mr Crausby

Moving on to organisational reform, the Prague summit declaration gives details of an agreement to streamline NATO's military command arrangements. What stage did those decisions reach? What details remain to be resolved and what interest has the British Government in the outcome of those deliberations?

(Mr Hoon) You are talking about the NATO command structure and the NATO reform. There was quite significant work at a fairly advanced stage. We have now produced a generic outline of what NATO needs for its overall headquarters structure. The acronym used is MMR - minimum military requirement - which means that we have surplus headquarters at present and we shall reduce that to a requirement, the detail of which I shall not go into now. It was agreed by heads of state and over the next six months that will be drawn up, the geography will be applied and the structure will be developed. There is a considerable reduction in overall size of our current structure, which is very much statically orientated. Another significant factor is the development of our two strategic commands, SACLANT and SACEUR, into two commands one of which will be responsible for transformation linking transatlantically to the US and will take forward future capabilities and developments as a strategic headquarters. The other headquarters, currently known as SACEUR, will look after all operations and so on. There is quite a clear definition of responsibility and a clear link between the two to take forward NATO's overall capabilities. That is a very significant change in the way in which we have been doing things since the last change in 1991.

Syd Rapson

On the two strategic headquarters - one, the strategic command, which clearly will be based in America and one, the ops command, will be in Belgium - how will they be able to co-ordinate and work together when they seem to be two separate strategic commands?

(Air Marshal Wright) It is fairly early days in terms of the detail. Transformation command will be responsible for all joint doctrine, concepts and education and the operations command will be responsible for the development of capabilities. In all those areas there will be a supporting relationship. The Defence Planning Group, which will be in Europe, will be linked very closely. SACEUR clearly has the need to identify the capabilities that are needed in the near term and the transformation command can link to that in partnership, looking at the future capabilities, say, beyond eight years. Training is an area where you will see great linkage. Under transformation command, for example, will be a joint lessons-learned analysis centre. It is very important, as the UK has learned, to draw out lessons learned to apply them to new exercises and to apply them to new capabilities. For example, the transformation command will analyse an exercise that the operational command is running. It will play the lessons learned back to the operations command to implement in the shorter term and play them back for the longer term. Equally, transformation command may come to the operations commander and say, "We need to run an experimentation exercise on UK capabilities". These are early days, but it is very much a partnership and a much clearer delegation of responsibilities and an avoidance of duplication.

I appreciate that. I shall watch how it evolves, but it is early days. When you talk about geographic commands, that is a sensitive area, as we know when we went to Europe and spoke to NATO. Are Norway and Portugal likely to lose their involvement in this? Will they be compensated? Because they have command structures geographically in their countries they feel that they are part of the team, but they will probably be the two losers. Will there be any compensation?

(Mr Hoon) Perhaps I can emphasise that there were no geographical decisions taken at Prague in that sense. The NATO military authorities have been tasked to develop the issue of geography and to report to the NATO supreme ministerial meetings in May and June of next year. The Air Marshal has set out the principles; the question now is to translate those principles into geographical practice, if I can put it that way. We have not arrived at that stage yet.

Was it delayed because it is a sensitive issue and you did not want to spoil Prague?

(Mr Hoon) It is a process of change and transition. We are going from a significant number of relatively static headquarters to something that is far more deployable and flexible. In a sense, over the next period those countries that agree with you to this extent are at risk of losing their static headquarters, and may well want to put forward an argument as to why that may not be the case, as to why it may be appropriate, for example, to have a fixed headquarters in the southern part of NATO's territory looking across at potential threats from the south. That is a perfectly proper argument and one that we shall have to take on board in considering how to apply those principles to the practicalities. We should not lose sight of the fact - I hope that this is wholly consistent with what I have said to the Committee all morning - that NATO itself needs to transform. Too many of its physical structures are still based on the kind of concept that we had in the cold war. Alongside the changes that nation states are making, we need to look at how NATO itself is re-organised to reflect modern, strategic threats.

What is the nature of the new mobile headquarters? How will they be staffed? We understand that there is a shortage of English speaking commanders for the mobile headquarters. Can you go into detail on that?

(Mr Hoon) There is progress. I think we have dealt with this already. From a single deployable headquarters, we have four?

(Air Marshal Wright) We have eight and we will eventually have six.

(Mr Hoon) There is a process by which each of the deployable headquarters goes through a certification process, to see whether it is capable. We have not quite got to the eight yet, but there is very significant progress.

(Air Marshal Wright) There will be six at the end of December. In terms of the English speaking aspect, all the headquarters are multinational with at least ten nations or more. Nations are deciding where to put their main effort. You will see a preponderance of UK personnel in some headquarters and fewer in others. All nations are doing that. They are all fully manned, which is one of the certification requirements, and they all have the right degree of multi nationality.

Syd Rapson: I am glad to hear it.

Patrick Mercer

Going back to NATO headquarters itself, I gather that there is a package of measures being produced to improve their effectiveness and efficiency. How have the powers of the Secretary-General in relation to the internal operation been changed at Prague?

(Mr Hoon) Again, that is an area where we want to see change. We have supported very strongly George's efforts to modernise the structures of bureaucracy internally. I was tempted to respond to Gerald's earlier point about committees. We believe that there are something like 400 odd committees in NATO and we would like to see a significant reduction. As ever, we have to reduce the right ones. That is work in progress.

Chairman

The MOD has an appalling labyrinth of committees.

(Mr Hoon) I could not accept that.

Chairman: Far more than 400, I venture to suggest.

Mr Howarth

I think you are being told how many.

(Mr Hoon) I was hoping for the answer, but it did not come very quickly. The technology is not yet that responsive.

Patrick Mercer

What discussions have there been over the future working practices of the NAC?

(Mr Hoon) That is a more practical way of putting the same question that I had earlier about the impact of enlargement. Those are issues that we are working on. I cannot say that there are specific conclusions yet, but the issues are difficult because clearly this is an alliance of sovereign nations and anything that impacts on any one country's sovereignty is of great significance. It involves the potential deployment of their armed forces. We need to be quite cautious about this. We need to ask the question: how would we feel if in any way our sovereignty was breached. I am sure that Gerald, James and maybe you, Patrick, would be the first to complain if decisions were taken to deploy Britain's Armed Forces without that being referred back to Parliament and to a British government.

Mr Howarth

Quite right.

(Mr Hoon) You would just like other people to give up their sovereignty but not us.

Patrick Mercer

We have heard about informal groupings of key states holding pre-meeting meetings.

(Mr Hoon) Which informal groupings?

We have heard of informal gatherings at the NAC; that there are pre-meeting meetings

(Mr Hoon) I do not think that I admitted to that, as I recall.

I am not suggesting that you have, but that has come to the Committee from other sources.

(Mr Hoon) I am sure that countries have the ability to meet as and when necessary to discuss a whole range of things that may or may not come before the NAC.

Mr Howarth

That is a very good barrister's answer.

(Mr Hoon) No, I ask the questions!

Patrick Mercer

There has been a strict limit to and in fact no increase at all to NATO's administrative budget. We are told zero growth. Is it likely to remain so or will there be some rethinking on that?

(Mr Oakden) A settlement has just gone through but it is a less than one or two per cent increase.

Chairman

Perhaps you could drop us a line on that?

(Mr Hoon) It is fair to say that the Secretary-General has made his views on this well known to member states.

Syd Rapson

On Russia, we live in unusual times. The Warsaw Pact countries are now part of NATO which must be satisfying to some extent. They are all in with the exception of Russia and NATO is now within 100 kilometres of St Peterburg. It is unusual. The relationship between Russia and NATO is extremely good. I think it is based upon a personal relationship between President Putin, President Bush and our own Prime Minister who plays a significant role in keeping this personal relationship going. At the Prague summit there was talk of deepening and broadening the relationship and co-operation with Russia. How is that to be done? My interpretation may be wrong, because a personal relationship between the three men cannot be the only thing, but it is the most important. How can NATO encourage more intensity to the co-operation and deepening which is satisfying and for which we are grateful?

(Mr Hoon) From our point of view, I think that can be done by engaging in practical co-operation. One of the weaknesses of previous arrangements was that they tended to be based on the exchange of rather fine-sounding phrases, but they were not always backed up by practical action. What we have seen since the NATO military council first met at the Rome summit in May is that we have sought to concentrate on specific issues, looking at the way in which we are engaged in peacekeeping, making assessments together of terrorist threats, looking at the way in which our forces may work together. Certainly from the UK's point of view, I have had conversations with my Russian counterpart, and we want to see something that is very practical. The co-operation between the UK and Russia, particularly since 11 September, has been remarkable, but at a very practical level, which is where I think the real progress needs to be made.

Sensible progress is the way forward.

(Mr Hoon) Yes. Sitting around a table of 20, or 27 as it will be soon, I think the weakness was that there tended to be rather theoretical discussions about co-operation. Since May we have tried to have items on the table that allow us to do something as a result of the discussions. That makes a real difference.

Mr Jones

I want to turn to relations with the Ukraine. The declaration from Prague was quite positive. It stated the relationship between NATO and the Ukraine. That was obviously against a backdrop of the controversy around the sale of radar to Iraq. How do you see relationships developing, especially when you have bellicose noises coming out of Ukraine, quotes from the FT and Mr Kuchma's spokesman who has made it quite clear that the unfounded allegations should be cast aside and that Ukraine's national interests and national status should be respected. To what extent is Kuchma himself an obstacle to better NATO/Ukraine relations? How do you see that going forward? I know we had an adept change of language to get the seating plan right in Prague. How do you see it developing?

(Mr Hoon) I went to Ukraine immediately after the NATO informal meeting in Warsaw. It is fair to say that we had a fairly vigorous exchange about allegations concerning the sale of radars to Iraq. I put the concerns fairly bluntly to the president and indeed to my counterpart. It is fair to say that they offered to co-operate in investigating the matter and efforts have been made to pursue those investigations. You are right, it still means that we are concerned about the evidence and it is a matter that we continue to look at very carefully. It is perhaps indicative of the kind of changes that are necessary in the Ukraine, so that those kinds of allegations cannot arise again, and if they do arise, they are investigated thoroughly and the government takes appropriate action. That is part of a wider reform that is necessary in Ukraine in order to allow us to feel more confident about their progress towards eventual membership of NATO. That indeed is their ambition.

One of the issues that the spokesman mentioned on 13 November this year was that Ukraine had asked the UN Security Council to investigate the allegations, and it was blocked by the United States.

(Mr Hoon) As I say, since I was involved in this I went to Ukraine. I saw the president; I had meetings with my defence minister counterpart. What we were offered - there was follow-up by officials - was access to the factory where radars are produced and access to information about any possible sale to Iraq. Those investigations are continuing.

The British have a lot of problems. For example, the Ukrainians wish the Security Council to look at it. There could be problems.

(Mr Hoon) The reality is that the two countries that are most obviously concerned are the United States and the United Kingdom. I took a strong line in Ukraine because if Iraq were to benefit from an enhanced radar system it would be the Armed Forces of the United States and the United Kingdom, flying dangerous missions over the no-fly zones, that would be most clearly threatened. That is why it is right that the investigation was conducted by the two countries most concerned.

Are you aware that Ukraine has asked the UN Security Council to look at the issue? The article just mentions a spokesman's comments.

(Mr Hoon) I think there has been some discussion at the UN. I do not think that I find that all that relevant or helpful to what I think is necessary, which is for us to be able to get to the bottom of whether or not the radars were transferred to Iraq.

Chairman

There are all sorts of allegations against Bulgaria, Croatia and Serbia.

(Mr Hoon) I am certainly aware of those allegations. I made my remarks in relation to Ukraine very carefully because what is important is that when allegations arise, the country in question takes strong action to deal with them and that there is no suggestion that the state itself is in any way involved in the sale. Certainly so far as Bulgaria is concerned, it is fair to say that we were very pleased by the very prompt response that the Bulgarian government took in order to deal with this matter.

105. Just a couple more questions. One is could you drop us a note on any bilateral meetings you have had - and I know far more interesting things take you away outside but give us an indication of life at a summit meeting.

(Mr Hoon) I am certainly willing to tell you what meetings I have had.

That is what I asked. Secondly, to save some time, could you let us know in a lot more detail what happened by way of the Mediterranean Dialogue and the enhancements thereof. That would be really helpful. Two more questions. One would be a very easy question to avoid but as somebody who has been committed to NATO for as long as I have been in Parliament and seen endless crises - and NATO's demise has been regularly predicted but it has always managed to hang on and come back, often reinvigorated - my anxiety now is that one of the main problems for the future of a vibrant NATO comes not from Russia or traditional sources but indifference on the part of the United States. Did you have any impression, Secretary of State, that the United States does not continue to wish to invest its intellectual and political effort, resources, manpower and equipment into NATO even though the traditional threats have long since disappeared?

(Mr Hoon) No I did not and indeed I think the present administration is absolutely committed to NATO, to making it a success, and to ensuring that it performs and develops to meet the current threat. Where I think in the longer term there is a concern is if Canada and the European members of NATO fail to provide the kind of capability improvements that we have been discussing, because I can foresee a situation in which the American people ask questions about the taxes that they are paying to provide military capabilities that are not only protecting the United States but are also protecting European nations, which is why we put so much emphasis on Europe improving its military capabilities as a means of demonstrating to the people of the United States our determination to make the alliance successful.

It is not that Gerald is paranoid about Europe, he may be but I am not, but I am really anxious, as he is and many are, because there are countries in Europe who would be delighted to see NATO go under so that the vacuum could be filled by some form of European entity. Do you get the impression from the heads of state in government who are gathered at Prague that they see the future of European security still much more in terms of NATO and the US commitment than any other, from my point of view, spurious and undesirable alternatives?

(Mr Hoon) I would not agree with your premise. Indeed, I do not think there are any European nations who are not committed to NATO and I believe that there is a recognition that European nations need to do more and need to do it better.

Chairman: I hope you are right. I am partly reassured but not completely by your answer. Frank to ask the last question.

Mr Roy

Secretary of State, Macedonia - the UK-led Operation Essential Harvest was a huge success and similarly Operation Amber Fox has done as well and it was due to finish on 15 December but obviously Prague has agreed to extend that. How long is that operation going to be extended?

(Mr Hoon) The agreement is to extend it to February but clearly we need to look at the continuing military need for an operation in Macedonia and who should undertake it, but the extension gives us some time in which to reflect on those two issues.

And what would be the state of play that would actually see a withdrawal come in a few months' time? What would be the ideal scenario?

(Mr Hoon) An assessment of the security situation on the ground in Macedonia. Whether that requires forces to be in Macedonia or whether they could be based elsewhere, ultimately it is about where we are in terms of the security of Macedonia.

Mr Howarth

What does that mean?

(Mr Hoon) The reason I put it in this way is because I think it is important not to assume that simply because we deploy force somewhere that we always have to carry on doing that. Our approach is that we need to look hard at the military justification for that requirement. If there is a case for continuing then clearly we have to find the ways of achieving that. If there is not then there is the answer.

Would you confirm that it is your view that whoever takes on that role they should be doing it for the right reasons and, for example, there should not be an EU force put in there on the basis that that gives the EU force an opportunity, if the EU force is ready to do it perhaps but not otherwise?

(Mr Hoon) What I am saying is there needs to be a justification for having a force there on the ground whoever does it.

Chairman: May I thank you all for coming. May I on behalf, I am sure, of the Committee ask you, Secretary of State, if you have any opportunity, to convoy this Committee's deep gratitude to those almost 20,000 members of our Armed Forces who are currently doing a magnificent job up and down the country on behalf of our constituents in relation to the fire fighters' dispute. Thank you very much for your presence here.