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Mr. Tobias Ellwood (Bournemouth, East) (Con): I note that my right hon. Friend's excellent report calls for more information. A request was made by his predecessor in the spring supplementary estimate in 2005 for more information on the figures that had been provided, yet that information is not available. Why does my right hon. Friend think that his own request will be more successful?

Mr. Arbuthnot: Because we have a listening Minister and a listening Government. I am sure that, this time around, the Minister will listen in a way that perhaps did not happen last time around. The value of this debate, and my hon. Friend's timely intervention, is that it will ensure that that happens.

Finally, our report outlines the reductions in the overall size of the armed forces, set out in the votes A for the financial year 2006–07, which the House will be
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asked to approve after this debate. They reflect the significant draw-down in the size of the armed forces, particularly the Royal Air Force, in line with the Government's future capabilities decisions. We do not propose that the House should refuse to approve the votes A, though we do have concerns about the overstretch of elements of the armed forces and are looking closely at that.

I am sure that the Minister will respond to our recommendations in a positive spirit. I have no doubt that his commitment to democratic accountability is second to none and I hope that he will support our aim of encouraging greater transparency in the way in which his Department operates. We look forward to receiving in due course the Ministry of Defence's considered response to our report. The Defence Committee will look at the main estimates closely when they are presented to the House and we will bring any concerns to the attention of the House. I hope that the Minister will not again take parliamentary approval of the estimates for granted.

4.21 pm

Nick Harvey (North Devon) (LD): I commend the right hon. Member for North-East Hampshire (Mr. Arbuthnot) and his Committee on their important report. The sums of money in question are certainly large, although that is unsurprising in view of the scale of the operations involved, and of the recent commitments to increase them. I note with regret that some of the points that the Committee has raised were also raised a year ago, but have not elicited a response from the Government. It does not make sense for all this to be approved retrospectively. Of course, it is impossible for the Ministry of Defence to know at the outset of the year exactly what the costs of its activities are going to be over the year, but Parliament should surely be given more information than it has been given in the past.

From time to time, we are inevitably asked what our involvement in Afghanistan and, in particular, in Iraq has cost us in total. The Government have published the figures for expenditure on operations and on capital equipment in each of the past three financial years, and will no doubt do so for the current year. However, a press release from the MOD's Defence Analytical Services Agency last September made the important point that the costs of peacekeeping in Iraq are just that, and that anyone trying to keep an account of the total expenditure must realise that combat operations have not been included in the figures that have been quoted. Will the Minister therefore confirm whether the published figures include combat costs? He has said in a previous parliamentary answer that it is not possible to identify separately the cost of combat operations. He has also made the point that those costs span two financial years, as the combat activities began in March 2003. Are the Government really telling us that they are unable to make an assessment, or even an estimate, of combat activity costs?

A needs assessment was carried out in October 2003 by the World Bank, in which it considered the tasks that lay ahead for the allies. By that stage, the armed combat phase had ended, and it was looking forward to
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the costs of reconstruction. The figures being produced, it noted, worked on the following assessment at the outset:

to carry out their work. Given that that is no longer the case, it is understandable that the cost of all that work has gone up and up. Has there been any assessment of the impact of that on the running costs, and on the various other organisations involved?

The Government have pledged a total of £544 million for the reconstruction work in Iraq. A lot of that money went through the international reconstruction fund facility for Iraq. In total, the World Bank estimated that $55 billion would be required. Of the $21 billion that America was going to pay, however, only $2 billion has been disbursed. I would be intrigued to know what the comparable state of play is with British finance. Three years on, with only two thirds of the American funds and just one sixth of non-American funds pledged having been disbursed, can the Minister tell us exactly how much UK money has been allocated? The latest report of the US Special Inspector General for Iraq Reconstruction said that the UK had pledged £250 million, and yet our Government tell us that the figure is £540 million. What proportion of the UK funds pledged have been spent so far?

With specific reference to Afghanistan, the Select Committee report asks for a breakdown of costs by financial year, and for more explanation of the £1 billion estimated cost over the five years 2005–06 to 2009–10. The Ministry has told us that it cannot go into that sort of detail. There was a report in The Sunday Times yesterday, however, about what purported to be a leaked Ministry of Defence document, saying:

That is no particular surprise, because the history of engagement by foreign troops in Afghanistan has never been happy, and no one should underestimate the task of the international forces now there. If the Ministry's own officials really think that fulfilling the objectives of the mission could, in principle, take as long as 20 years, what on earth do they think that it will cost? How can they state with such precision that it will cost £1 billion? From where exactly have the Government got the figures on which to base their request for that £1 billion?

Has sufficient money been allocated? The Select Committee Chairman said that if anything, the Committee was concerned not about the figures being surprisingly high but, in relation to some aspects, whether they were high enough. I wonder whether asking British and international troops to undertake some of the work envisaged has necessarily been assessed as the most cost-effective method. Has sufficient money been allocated in direct aid to the provinces in Afghanistan for training and capacity building for the Afghan national army and police?
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The UK is the lead nation on counter-narcotics, but how much are the Government spending on that in Afghanistan? I am not referring to the consultancy and security teams: how much help have the Afghan Government received? What measurable targets have the Government for improving and enhancing Afghan military capability?

The Minister said in a written answer that the number of Taliban in southern Afghanistan could amount to over 1,000, but what is his assessment of their military capability? He also said that there were a range of illegally armed groups in the south, which must be the case, but that the number of people involved could not be determined. Has the Ministry really no estimate of the size and strength of those groups? Given that the British forces are expected to have a role in their disarmament and demobilisation, surely there must be some assessment of what those forces are up against.

Does the increase in the role that we will play in Afghanistan, in conjunction with ongoing work in Iraq, mean that United Kingdom forces will continue to work beyond the planned level in the defence planning assumptions? If that is to continue throughout the three years for which the Government expect the operation to last, there must be considerable concern about the effects on retention and recruitment. Is there any new evidence on the numbers resigning? What about the effects on the reserves, who have been over-tasked, and on the availability of specialists such as medical staff? There are also questions to be asked about a shortage of airlift, both fixed-wing and helicopters. A distinction should be drawn between helicopters that can lift troops in safety, and combat or reconnaissance helicopters that do not carry troops.

When the allied rapid recruitment force is due for relief next year, will the UK be stuck with the task of running the headquarters, or is there any realistic prospect that anyone else can take it over?

As we know, and have seen on our television screens, the Secretary of State has spent the last few days in Iraq visiting the troops there. Although he has said that there is not, as yet, a state of civil war—an assessment with which we would agree—he has nevertheless acknowledged that the situation is very serious, and that there is a danger of its tipping into civil war at very short notice. While many believe that the presence of British and American forces in Iraq is in a sense part of the problem, any suggestion of their rapid removal would only run the risk of tipping what is already a pretty desperate situation into precisely the civil war of which the Minister has warned.

The scale of the commitments in Afghanistan and Iraq is immense, and the challenges faced by the British forces in both countries are extremely worrying and difficult to quantify. No one would expect the Government to be able to say precisely what the cost will be, but serious tasks are being undertaken, and there is a risk of serious casualties. I think that what Parliament and the British public want is a sense that there really is a Government strategy. It is clear that the intervention in Iraq has caused many difficulties, but obviously we must deal with the world as it is now.

Afghanistan has to be helped. That will cost more in cash and in casualties than it might have if the initial effort had been sustained throughout the period for which we
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have been there, but we cannot ignore what remains a twofold threat from drugs and terrorism. It is also true that Iraq and Iran cannot be compartmentalised or viewed entirely separately, given their geography and their history. Isolating Iran and a long-term occupation in Iraq can only deepen the problems. Difficult as it is, finding a way of re-engaging with Iran is absolutely necessary.

I hope that we can learn from the experiences of the past five years. Clearly, we cannot pull out of Iraq in a hurry; our work there is important—and perilous. As we take on a considerable new responsibility in Afghanistan, it will be Parliament's role to keep a very close eye on the situation. I welcome the Select Committee's report and the questions that it asks about finance. Parliament will be failing in its duty if we do not continue to hold the Ministry of Defence to account for the important work that it is undertaking.

4.35 pm

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