Examination of Witnesses (Questions 20-39)
LORD DRAYSON,
MR ANDREW
MATHEWSON AND
MR ROBERT
REGAN
12 JULY 2007
Q20 Lord Anderson of Swansea: I recall
seeing figures, admittedly rather dated, at that time that only
about three per cent of France's total procurement was from sources
outside France. Has it changed markedly?
Lord Drayson: It has improved, but I do not
think it has improved to the extent which we would like to see.
I have been involved in really quite significant discussions with
France.
Q21 Lord Anderson of Swansea: So
there has been reciprocity?
Lord Drayson: Yes. What I detect is a change
in mood in France towards this and a sense at the highest levels
within France of a recognition of the issue and a need to do more
to address that. The way in which I believe it gets addressed
is on a project-by-project basis. It is just not good enough to
be setting out high level political aspirations, it is about the
reality happening. When we can see UK companies being able to
acquire French companies, when we can see UK companies being able
to participate in French procurement projects, then we will know
we have made some progress.
Q22 Lord Swinfen: Minister, the recent
conference on the EU Constitution, or whatever name you like to
call it, appears to have had forced through by the French an ability
for state aid to various industrial organisations. How is this
going to affect the position and in particular how will it affect
our own?
Lord Drayson: I believe this is a real concern
to us. In my role both as Minister for defence equipment and support
in the Ministry of Defence but also in my new role as Minister
for business, enterprise and regulatory reform, I have the responsibility
for aerospace, and when one looks at Airbus in particular one
can see a company whose management is trying to transition to
normalised standards of international corporate governance where
management clearly want to get to the point whereby the direction
of the company is not dictated by—I am trying to think of
the phrase—economic patriotism, but what is best for the
business. Airbus has Boeing breathing down its neck. Airbus as
a business for the good of us as a customer, for the Ministry
of Defence, in terms of being able to access quality large aircraft
which we need, like the A400M, for the United Kingdom, which is
a major provider of parts of the Airbus aircraft, particularly
the wings and the undercarriage, it is very important that Airbus
as a company prospers. To prosper it needs to be free of political
interference, the management needs to take the tough decisions
they need to take in relation to the global market conditions
in which they find themselves and we, within the United Kingdom,
are clearly making the case for that as opposed to the company
being dragged either the French way or the German way because
of the particular views as to how it is seen as a national asset.
Lord Lea of Crondall: This is on the same theme,
as you mentioned Airbus. I was going to raise it later. When the
Defence All-Party Group met Airbus last week one of the questions
that was put was what has this got to do with the European Union
and the initial answer was "nothing" but all the supplementaries
modified the answer. For example, the dispute with the United
States has a lot to do with the European Union per se and trade
policy, as you will know very well. Would it be fair to characterise
your answer on something like that as being that it does not really
matter if the French have a Bismarck-plus sort of philosophy as
long as we have a level playing field in practice?
Lord Anderson of Swansea: Colbert rather than
Bismarck.
Q23 Lord Lea of Crondall: All right,
Colbert.
Lord Drayson: I think the level playing field
point is very important but as important, although not directly
connected, is the recognition that one talks about the effects
of globalisation. There is a danger of Europe not recognising
the reality of the rate of growth that is taking place within
China, that is taking place within India, and failing to adapt
its policies to enable the companies which are today successful
as European companies to be able to grow and compete to exploit
the realities of those markets. Airbus has the potential to be
a very successful global aerospace company and EADS has the potential
to be very successful with its wider defence and space assets,
but for it to do so I firmly believe that the managements of those
businesses need to be allowed to get on and manage those businesses
in the interests of those businesses in a global sphere. That
is the UK policy. We have learned how that works and our role
within Europe is to make that case. There is not a long-term future
for so-called national champions. You can make it last for a length
of time, but in time the realities of the global market catch
up with you.
Q24 Lord Hamilton of Epsom: Minister,
you will know better than any the deep suspicion with which Congress
and, indeed, the American administration holds much of Europe
and they are extremely reluctant to transfer technology. You have
mentioned the Joint Strike Fighter, and of course we have had
serious problems with the United Kingdom actually getting the
technology transferred there, and that may now happen. I do not
think you would be able to see a situation where, even if the
French wanted it, the Joint Strike Fighter would be deployed on
the French aircraft carrier, for instance. I think the Americans
are very worried that the French might end up selling their technology,
if it got through to the French, to their potential enemies. How
does all this affect British companies when they are being asked
to collaborate with European ones when so much of the best technology
in defence comes from the United States?
Lord Drayson: I think that we and the United
States recognise that point I made earlier on in the discussion
is a fact of life, that countries need to collaborate on defence
because of the realities of the complexity and cost of modern
defence. That is true of the United States. It is not often talked
about but there are technologies which the United States has provided
by the United Kingdom, for example, and you mentioned Joint Strike
Fighter and the Joint Strike Fighter relies upon British engine
technology, it relies upon British manufacturing technology. There
is self-interest in all nations in finding ways of doing this.
All nations are therefore concerned, and the United States is
rightly concerned, about making sure that proprietary know-how
and military secrets do not leak to other places when they should
not. That is about having good controls and compartmentalisation
to allow collaboration to take place on a project-by-project basis,
having the laws, the policies, the procedures, the compartmentalisation
to enable those collaborations to take place without that intellectual
property leaking out and secrets being lost. There are decades
of experience to show us that can be done. The best example between
the United Kingdom and the United States is in the nuclear and
intelligence fields. In those two fields we have shown that it
has been possible to collaborate at the highest level in terms
of technological know-how and at the highest level in terms of
security sensitivity very satisfactorily. We can certainly do
that in other areas, such as Joint Strike Fighter, but we also
need to recognise that there are industrial lobbying concerns
that take place and, therefore, it is up to politicians to make
sure they put in place the structures to address the concerns
that people have. I am very pleased with the progress which we
recently made, our Prime Minister signing with President Bush
the new treaty between the United States and the United Kingdom
to hugely facilitate the transfer of technology for defence assets.
You are right, it has to be ratified, and we hope and expect that
it will be, and we would like to see this done by the end of this
year and that would enable projects such as the Joint Strike Fighter
to be pursued within a framework which reduces a lot of time,
cost and trouble for both sides, but we have to show to all of
our partners that we are a nation that can collaborate, keep secrets,
not allow leakage to take place, and that is something which we
are perfectly able to do.
Q25 Lord Hamilton of Epsom: The point
here is in terms of European collaboration and the degree to which
that unnerves the United States and they then think that technology
which has come to us may leak into Europe and be completely out
of their control.
Lord Drayson: I recognise that people may have
this concern but it is a concern which we can meet by showing
that this does not and will not take place.
Q26 Lord Crickhowell: Can we turn
to Battlegroups. At Question Time yesterday you denied that British
Services were under-supplied and over-stretched but I think you
will accept that expeditionary capability is currently at pretty
full stretch. Will the Battlegroup, including the supporting capabilities
that we are going to provide for the second semester of 2008,
be simultaneously available for other operations? How will priorities
be decided between the EU, NATO and our own national demands at
a time when we have got activities of an extreme character going
on in several parts of the world?
Lord Drayson: You are absolutely right to focus
on this matter because we are under significant pressure, so we
need to be clear about the priorities. We believe that we do have
a robust process in place for us to manage this. Where do our
priorities lie? Our priorities are, firstly, our national requirements
will always take first priority. We do believe that it is possible
for us to manage our requirements within commitments that we have
both within the EU and within NATO but we need to recognise that
we have separate forces on standby relating to NATO forces. It
is not so much, we believe, because of that separation of a potential
conflict between an EU commitment and a NATO commitment, it is
more likely to be a conflict between a national need and an EU
need or a national need and a NATO need. If push came to shove
and we had to make a call on that then it would be our national
need which would have to come first, but we do believe that despite
the pressures we are under this is something which we can manage
and we can meet.
Q27 Lord Crickhowell: Just one supplementary:
given that our national priorities come first, and I welcome that
statement, are the arrangements in place such that if we said
now, "We are terribly sorry, we cannot do it at this moment",
there are other countries in a position who will step forward
and fill the gap? Is there enough cover in the Battlegroup arrangement
so that if the pressure is falling on one particular country at
one particular time it is covered?
Lord Drayson: We would hope that occasion would
not arise. What we would be hoping to see is that we would not
find ourselves in a position where we had to make a call between
the two demands, but you asked me the question directly as to
which comes first and that was the answer. In that circumstance
then it would fall to other nations to cope with that, to bid
against it, typically against a United Nations request and so
forth. We need to recognise that there is a variety of capabilities
within Europe to be able to provide levels of force of different
capabilities, so I believe it will depend on the circumstances
at the time. What is your feeling on the practicalities?
Mr Mathewson: As you will know, there are two
Battlegroups on the roster at any one time so if at the last minute
the British Battlegroup was unavailable then there is recourse
to the second Battlegroup. If you are asking whether if we chose
to withdraw the Battlegroup at some time before that others could
easily fill the gap, I think the answer is no. The answer is no
because whereas we provide our Battlegroup from formed units,
permanent units of the British Army, most of the others are multinational
formations which come into being for that period and then fade
away. It has taken the Swedish Battlegroup, for example, which
is on in the first half of next year, quite some time to build
up that capability to bring the unit together and it is not a
permanent capability, it will fade away shortly after they come
off the Battlegroup roster. That is, to some extent, a weakness.
On the other hand, it is a significant improvement in the capability
that they have been able to offer because until today the Swedes
could offer no expeditionary capability. The short answer and
the honest answer is it would not be easy for a British withdrawal
from the Battlegroup roster to be easily substituted by one of
the others. If we did it now then we would go through an emergency
Battlegroup generation process and we would start looking round
now to see whether anyone could fill the gap which appeared at
this time next year, but it would not be a straightforward matter.
Q28 Lord Anderson of Swansea: We
are obliged to make our forces available during the second half
of next year. There is one scenario where we say that because
of our priorities at the very beginning, our Battlegroup is, in
fact, not available, there is another one if during the course
of that six months an obligation of a national nature were to
arise. What are the contingencies that are available in such circumstances
and also in the changeover period from one six months to another?
Mr Mathewson: I think it is as the Minister
said, if at short notice and at the time a national contingency
arose which was neither a NATO contingency nor an EU contingency,
a purely national contingency, that national contingency would
take priority. The Battlegroup is available to the EU but there
is not a binding obligation for us to provide it, it is offered
in good faith in the expectation that it will be available.
Q29 Lord Anderson of Swansea: I suppose
by definition the obligation would be at a lower level in any
event than a NATO obligation.
Mr Mathewson: In a sense, yes. Potentially in
the sense of a NATO obligation we could be talking about collective
defence. The operations we might make the Battlegroup available
for through the EU are the so-called Petersberg tasks, they are
the broad range of peace support operations. They are in a sense
discretionary, there is a political process to go through to decide
whether we undertake these operations. There is a degree of choice
about whether this is, on the one hand, the sort of operation
which the EU wants to get into, and on the other hand whether
we have the capability to take it on. We offer the Battlegroup
in good faith, we expect it to be available for the second half
of next year, but, as people recognise, we do have to balance
that against the entirely unexpected.
Q30 Lord Tomlinson: If we look at
the eight six month slots from next year through to the end of
the present roster of the Battlegroups, there are four slots which
are just filed with "to be determined" and one slot
"to be confirmed". That ain't much of a roster, is it?
Mr Mathewson: The roster evolves.
Q31 Lord Tomlinson: It is evolving
remarkably slowly. It is like the wheels are grinding exceeding
slow.
Mr Mathewson: There are a series of Battlegroup
commitment conferences where nations decide what they can offer
and when they can offer it.
Q32 Lord Tomlinson: Or not offer
or not decide.
Mr Mathewson: Yes.
Lord Drayson: The reality of the context of
this is, I am sure the Committee recognises, that those countries
which are both members of the EU and members of NATO are facing
significant commitments where their countrymen have died in operations,
have taken casualties, there is real pressure, I would say, in
terms of military capability in certain areas that reflects in
some ways and that is something which we need to manage. Our role
within the United Kingdom is to encourage our coalition partners,
whether as part of the EU or NATO, to make their contribution
to these. We need to actively make the case, and we do, but you
are right to highlight concerns about this being slow.
Mr Mathewson: As an example, the Swedish-led
Nordic Battlegroup will be on duty in the first half of 2008 and
they have recently said that they will also provide a Battlegroup
in 2011, I cannot remember which semester. That is an example.
Q33 Lord Tomlinson: They are down
on the list for 2011. They are there.
Mr Mathewson: Yes, but it is an example of progress,
if I may. Six months ago they were not on the list. This is an
example of a capability which hitherto has simply not existed,
there has been no Nordic Battlegroup, and they are now taking
two slots in the next few years. I quite take your point that
we could wish they moved faster but overall this is capacity which
before the Battlegroup initiative came into being had not existed
outside of one or two countries who had it on a national basis.
Lord Drayson: It is not appropriate in a public
forum to be pointing fingers at individual countries, however
we do feel there are some countries who are not pulling their
weight in this.
Q34 Lord Tomlinson: And in private
you tell them?
Lord Drayson: We certainly do.
Q35 Lord Hamilton of Epsom: When
Mr Mathewson was last here he said that the last thing that the
Battlegroup was ever likely to do was go into battle.
Mr Mathewson: I do not recognise those words,
I must say, my Lord.
Q36 Lord Hamilton of Epsom: Please
come back if you find that I am misquoting you. You made it clear
to me anyway that this was a peacekeeping force rather than anything
else.
Lord Drayson: Yes, that is true.
Q37 Lord Hamilton of Epsom: In which
case, I think it would be a good idea if you changed the name
because Battlegroups are things that ought to be sent to Afghanistan
where we know, of course, that the contribution of our European
partners has been pitiful in terms of their enthusiasm to go into
the Helmand Province where they might actually get shot at. There
are so many vetoes too, are there not, on the deployment of this?
There has to be unanimity, I think, right from the beginning and
only the individual participants can veto going. Do you think
it will actually ever go anywhere at the end of the day?
Lord Drayson: Yes, to be fair to this, I do.
I take your point about the name. The thinking behind this, as
Andrew has said, is primarily about humanitarian tasks, it is
in response, for example, to a UN mandate in a certain area, but
we also need to recognise in the modern world that a humanitarian
task can quite quickly turn into a pretty nasty operation where
troops come under fire and, therefore, a nation is putting its
troops in harm's way in those circumstances. The point you make
about people contributing forces as part of NATO in Afghanistan
I absolutely accept and we are robustly making that case to our
NATO partners. This is another example where through European
collaboration we have made really good progress. It is important
not to be negative about it and criticise what it is not but to
laud what it is so far and encourage it to develop in the positive
direction we want to see it go. In essence that is our policy
and it would be counterproductive to do otherwise, particularly
with those partners who are a bit ambivalent about this.
Q38 Lord Lea of Crondall: The last
exchange obviously reminds us that this is not just a question
of "pulling our weight against the background that there
is an equal share of gross national product going to defence around
Europe". Is this not a reflection of a totally different
problem, in fact, and far from this meaning that we should resile
from putting more eggs into the European basket, if we want to
have a stronger leadership role in saying that the European countries
must meet a certain share of GDP going to defence—we are
miles away from that at the moment—is not the logic that
we cannot have one policy that complains about people not pulling
their weight yet we do not have any mechanism at the moment for
saying, "You should have X per cent of your budget",
imagine telling that to the Germans or whatever, "in defence"?
Is that not the issue that lies behind this to some extent?
Lord Drayson: We do very clearly make the case
that we regard it as important that countries do spend a higher
proportion of their budget on defence because if you do not you
are unable to participate in the way in which we describe and,
therefore, if one has this concept of collaboration and collective
defence then it is important for nations to contribute to it on
a fair basis. We do make the point that as a proportion of national
product Europe as a whole is not balanced when you look across
the Member States and that is something which we think needs to
be addressed.
Q39 Chairman: Minister, we have come
to the end of the time which we originally suggested that we would
detain you for, would you be able to stay for another 15 minutes?
Lord Drayson: I need five minutes to get back
to the Department.
| 
