Examination of witness
General Lord Houghton of Richmond.
Q1 The Chair: Thank you very much indeed. The Committee is very grateful to you for coming to give evidence today. We have quite a number of questions.
In retrospect, do you think the Government were right to integrate defence and national security? It is fair to tell you—we have only recently published it—that we have had observations from others who have given evidence that they do not think this was necessarily a good idea in the reviews in 2010 and 2015.
If you think they were right, that is fine, but if you do not, did either element lose out as a result? It has been put to us that perhaps one or other is bound to lose out.
General Lord Houghton of Richmond: I would not see it as a zero-sum game. It is absolutely imperative that defence and security are combined in a review. My ambition would go way beyond that, and in 2015 it aspired to do so. Both the soft and the hard elements of national power ought to be assessed in the context of national ambition. Therefore, I do not think it is just a matter of defence or security. It is about values, national prosperity, national interest and national values.
Any strategy for the country that is worth its name ought to recognise that hard and soft power, defence and security all go hand in hand. They should be reviewed as a single entity, but from that derive separate sub-strategies for defence, prosperity and security.
Various departments will have to play a role in the sub-strategies of several other departments. Take the Ministry of Defence. It will have roles to play within prosperity, values and definitely domestic security. It is absolutely right that the two are integrated. I would continue to build on the attempt in 2015 to do this, which was partially quite successfully, and not attempt to disaggregate the whole thing back to purely sectional interests within departments, because I do not think that reflects the nature of the world.
The Chair: You might like to know that in the past this Committee has expressed the view that the whole thing should come from the view taken by the National Security Council of the overall strategic interests of the country. The capacities that you need should then be identified, then the funding, and the thing should follow, rather than these being conducted sometimes as parallel exercises.
Lord Hamilton of Epsom: Would you include overseas aid in soft power, and should the military play a role, as the Americans do, in distributing it?
General Lord Houghton of Richmond: I would definitely include overseas aid. You can argue about whether 0.7% is the right figure and about the degree to which some overseas aid may be misspent. But you can argue the same thing about the way money is spent in defence. It will not always be a perfect allocation of funds to affect an outcome, but we should be proud as a nation that we spend a significant amount of money and meet the target on overseas aid.
It has a complementary role to security in the context of the maintenance of stability and the avoidance of conflict. Overseas aid, properly applied up stream in potential conflict or unstable areas, is a soft way of achieving what might be achieved later only at much greater expense.
The degree to which the military should be involved in dispersing it is very much down the nature of the security environment in the place in question. There are inevitably times when the places in which well-focused overseas aid needs to be applied are ones where the security conditions naturally lend themselves to some form of security blanket or assistance.
Q2 The Chair: I return for a moment to the 2015 integration. To what extent do you think the fact that we had to have the modernising defence programme process resulted from failure in the 2015 judgments?
General Lord Houghton of Richmond: Forgive me, I am in a room of highly intelligent people who know this subject, but outside this room a lot of people make a very big mistake in failing to understand that there are at least two significant bits to strategy.
The first is what you might call strategic formulation, which is in the context of the time and what you can foresee to make certain that the ends, ways and means of strategy are in coherent balance. The ends are the national objectives that you have for the country, the means are the money and the capability that it can buy, and the ways are the ways in which the means and capabilities are applied to meet those objectives.
Far too many people and pundits think that once you have conducted that exercise in strategic formulation, the strategy should then run for five years, and it should work. The simple fact is that if you live on a dynamic planet and the context is dynamic, the second and vital part of strategy is that it is managed in order to maintain coherence while all sorts of other things are changing: demography, economics and the nature of the threat.
In talks I used to give my people on this I would liken that coherence of strategy to helicopter flight. The ends, ways and means of strategy are inherently unstable, so you need processes between strategic defence reviews to keep on stabilising the coherence of ends, ways and means or your strategy will very quickly unpick itself.
If I have a criticism, it is that things such as a national security capability review or a modernising defence programme should come as surprises to government between the strategic fixed points of the quinquennial formal review. To my mind, we should absolutely expect that in a world as dynamic as this—I know that you have heard evidence that bears witness to the dynamism of the past three or four years—reviews should anticipate that and there ought to be better machinery to carry out the national security capability review and the modernising defence programme as part of the natural routine business of maintaining strategic coherence without it coming out as a headline and surprise.
Q3 James Gray MP: You have come close to answering this question, which is that the extra £1.8 billion announced in 2018 to achieve Joint Force 2025 is quite a significant part of the £34 billion of the defence budget; it is almost at 3% or 4%, I think, the last time I heard. When you were carrying out the 2015 SDSR, did you anticipate that gap?
General Lord Houghton of Richmond: We did not anticipate that gap, but by the end of the process—I will choose my words carefully—we were gusting towards a collective self-delusion that the defence programme was affordable.
In many ways you have to take yourself back from the standpoint of today, because it is quite difficult to recall the remarkable optimism and hubris of 2015. You had a David Cameron Government who were returned with a surprising majority. Brexit was not ahead of us. We had gone a long way towards balancing the nation’s finances. There was a sense of huge optimism about government and the country, and dare I say that some of that optimism spilled into the thought that the economy would be on the up and that 2% of that economy would be more money, so you could take a certain amount of risk in the affordability of the forward programme.
Even so, many of us were saying that we could not guarantee that some of this would be affordable. From my own perspective, there was a mismatch between what went on the list and what the available money was, so the alchemy of efficiency was conjured up. To be frank, some of those aspirations of efficiency were at least whimsical. The idea that you can keep rolling double sixes in the hope that you will be able to afford a programme is not a good basis for strategic formulation, but that must be seen in the context of the time and the enthusiasm and ambition in the form of, “Let’s get the P8s and let’s just have British F35Bs on both our carriers”, and all that. That was the mood of the moment.
However, rather than rolling double sixes, we rolled double blanks—I am sorry, that is dominos; I mean double ones. There was the Brexit thing that impacted on exchange rates, which were hit. Some of the early ambitions about efficiencies were patently seen to be ones that could be realised only in the longer term. Some of the contingencies that were set to make sure that the programme was as affordable as it should have been were not big enough. Do not quote me on the absolute figure, but it was recognised that in the 10-year equipment programme there was probably £20 billion of risk, and efficiencies could buy out a significant part of that, but the rest of it would be dealt with as it came along.
James Gray MP: If you agree that the 2015 SDSR was, as you put it, gusting towards self-delusion and that collectively we had failed to foresee what turned out to be a significant £1.8 billion hole in the budget, the implication must be that the SDSR system itself is flawed. If the flavour of the moment and if the optimism of a new Prime Minister could result in a miscalculation of that size, quite clearly it was the SDSR that was flawed and had failed.
General Lord Houghton of Richmond: In conceptual terms, the SDSR process to bring about a coherent balance between the ends, the ways and the means was fine, but insufficient means were granted to realise the ends that had been posited. As I have just tried to describe, the atmosphere of the time permitted the Ministers making the decisions to lean into the risk of affordability, and that contrary to the confidence about doing that, events moved quite quickly in another direction.
Was the system flawed? Inherently, dare I say it, there is a desire on the part of government to be able to make things affordable—to buy kit and all that sort of thing—to get a very good message to the public. It was known at the time that efficiencies were being put into the affordability of the programme that were based on absolutely no underpinning facts about how they were to be realised. They go by the name of a former Cabinet Secretary, and they are his wedge.
So, to your question, the knowledge of the strategic formulation was fine, but people took a risk on the affordability going forward, which to an extent I would call self-delusion because I bore witness to it.
James Gray MP: What you are describing is the meeting place between strategy and politics. To a simple fellow like me, the SDSR ought to be all about the National Security Committee’s risk and the means to achieve that, with the Treasury providing the money to do it. It should not be about politics at all, but what you are describing is a real political atmosphere significantly affecting the outcome of the SDSR.
General Lord Houghton of Richmond: Yes. You could put a more benign spin on this and say that there was knowledge of inherent risk in the affordability of the programme, so I would argue that a system to manage dynamically the coherence of the strategy would have readily identified that certain things had happened that would make that programme genuinely unaffordable in year-on-year terms.
In many respects, the £1.8 billion of new money was not money for new things; it was the element of the risk materialising, which therefore needed a revisiting of the means or else it would not have been possible to sustain the ambition or the ends of the strategy. I sense that it has come out as, “This was miscalculated, these things went wrong. Therefore there is this emergency requirement”. There was an element of predictability at one end of the arc, as it were, so we should not have been that surprised that that amount of money was needed in that timeframe.
Q4 Dominic Grieve MP: I understand fully your point about getting away from the concept that you have a strategic defence review and then do nothing about it for five years. But if we look at what happened in 2017-18, with the Government’s decision to hold only a limited review of national security capabilities, was that good enough in view of the extent of the change since the 2015 optimism, or should we in the circumstances have said, “Actually, even though we can factor in change as we go along, this now requires a complete rethink”?
General Lord Houghton of Richmond: To be honest, I do not think it did require a complete rethink. The strategy’s ambition was quite sensible. It linked security, prosperity and our values. I take my hat off to that as being highly coherent.
However, you cannot just revisit the means of strategy, while offering it no more money, without revisiting the ends of strategy. The business of dynamic management should have recognised, therefore, that there was now a mismatch between means and ends and said, “This money is now needed to plug this potential shortfall in our ambition”.
To me, there are only two strategic levers at the end of this that are pullable: one is that you lessen your national ambition; the second is that you revisit the Government’s risk tolerance for security and defence. There was absolutely no appetite for revisiting it. So in the absence of new means being granted—forgive me, I am not an expert on the national security capability review or the MDP, but I have a flavour of them—what was done, somewhat typically, was a revisiting of the ways.
The alchemy of new stuff—let us have a fusion doctrine, let us produce some reprioritisation—and the idea that without revisiting the ends or giving it any more money, some alchemy can bring this about, in many ways is the worst of all worlds. It might reassure the public, it might be an element of soft deterrence, but I do not think that it convinces many people that the coherence has been maintained.
Q5 Lord Powell of Bayswater: Lord Houghton, turning to the modernising defence programme, when you looked at the outcome of that as an experienced military man now freed from the constraints of office, did you say to yourself, “Whoopee, that’s great. I wish we’d had that”, or were you a little underwhelmed and thought, “This does not seem to have any money attached to it, so it probably does not mean very much”?
General Lord Houghton of Richmond: I slightly answered the question in what I have just said. It was a huge privilege being in the House of Lords when the MDP was the subject of a Question, rather than a debate, and as every single person got to his feet there was just a difference of volume when it came to the underwhelming switch. It was underwhelming. In many ways it was an emulsification of ways. It did not revisit anything about the ends of strategy or the means. It just reproduced stuff which good departments would be doing anyway.
I sat on Lord Levene’s review of defence. The modernisation of defence is the permanent task of defence. The idea that you suddenly need to start modernising it even more quickly is a bit of an insult to those who have been at the helm thus far. A lot of that, to me, is no more that verbiage, and because it was not connected to a formal revisitation of ends or means, I join the ranks of the underwhelmed.
Lord Powell of Bayswater: That is very reassuring to hear. I am sure that is justified. What advice would you give the present Chief of the Defence Staff when there is next a spending review on defence? How would you urge him to approach it?
General Lord Houghton of Richmond: In conceptual terms, the way it was approached in 2015 was considerably better than in 2010, but each review has a context. The strategic driver of the 2010 review was a strategic response to the strategic shock of austerity. It was not really anything to do with Britain’s place in the world. It was, “How do we make our contribution to balancing the country’s books?”
The first thing is to get the strategic context of the review right, and in 2015 it was far more confident and forward-looking than has played out subsequently. The second thing is not to allow the interface of the coherence of strategy to become unhinged by the requirements of political presentation. To an extent, that is what has undermined the 2015 review.
Also, do not allow yourself to be seduced into the delusion of affordability when you just know it is not there. Efficiencies against our manpower and their conditions of service, pensions, et cetera, were being bandied about as the downstream efficiencies that would make that affordable. But you must not trade out of our most valuable asset purely in pursuit of an exquisite shopping list of shiny toys. That is a rapid way to undermine the Armed Forces.
Lord Powell of Bayswater: But do you think that a strategy review will really determine what we spend on defence, or will what we spend on defence have to determine the strategy?
General Lord Houghton of Richmond: Inevitably, we have to live within some form of financial limitation. In 2010 it was quite evident that it was going to be relatively austere. But if you know that you will be severely financially constrained, as the professional head of the Armed Forces, as the CDS is, you have to be the conscience of government that something has to give at the political end of this, with the two things that I have mentioned: national ambition or variations of national risk tolerance to threats.
The Armed Forces will do their best to buy the most appropriate suite of equipment and apply it in the best ways possible, but you will have to constrain your ambition and, to an extent, own the risk of the security and defence implications.
Lord Powell of Bayswater: I agree that this is hypothetical, but can you not conceive of a situation where, faced with what they regard as an unsatisfactory financial outcome, the Chiefs of Staff would exercise their rights to march across to No. 10 and demand an audience with the Prime Minister?
General Lord Houghton of Richmond: No. On each of the SDSRs that I was party to, the Prime Minister always gave the chiefs an audience on it. In part, it is the political presentation of publicly being seen to buy the chiefs into it. I am of the school that believes that if you happen to be the chiefs of the moment, you are there because you are meant to be the best people of the moment, so you have a loyalty to government to make sure that you make your best stab at getting the right capabilities and applying them in the right way.
I do not think this is a resigning issue or anything like that, but you owe it to be absolutely honest with the Prime Minister about the degree to which he is asking the impossible or running risks that he is not fully admitting to.
Lord Powell of Bayswater: One could envisage this becoming more practical and realistic in the future, perhaps, but I do not expect you to answer that.
Lord Hamilton of Epsom: To put Charles Powell’s question in a different context, the MoD has always claimed that defence inflation runs ahead of ordinary inflation. So what should the increases in the defence budget be just to stand still?
General Lord Houghton of Richmond: I have heard different statistics—for example, defence equipment inflation is more at the 4% end. I hesitate to put an easy figure on what you should build in to defence inflation in the equipment programme that is not instantaneously challengeable.
We should not submit to the inevitability of that level of inflation. There are other ways of making ourselves affordable, but there has to be a recognition. You cannot liken a nuclear submarine to a Ford motor car. If you are producing something with such exquisite technology—a nuclear submarine is technically more complex than landing on the moon—there will inevitably be inflation, cost overruns, things that contingency must take into considerable.
I accept that it is inevitable that defence equipment inflation will be greater than that of normal inflation in the commercial world. A forward-going budget has to recognise that, particularly if you want to remain technologically at the cutting edge.
Q6 Lord Brennan: You have given us a number of examples of lessons that you have learned, or should have learned, from this review process: strategy that anticipates proper assessment of the affordability risk, and strategic coherence in between reviews.
Are there any other big-picture lessons that you have in mind? In particular, what do you think should be the frequency and format of reviews, and what happens between them?
General Lord Houghton of Richmond: The idea of the five-yearly review is absolutely fine. I sometimes wonder whether a full understanding of the global context within which the review takes place is sufficiently considered in the review’s outcomes.
On the ability to flex money quickly to buy new resources, there is very little flexibility in a defence programme. We commit virtually everything. When we go to war, we have a process of urgent operational requirements that buy in new kit to optimise for the specific an armed force that is primarily optimised for the generic.
In the nature of the world in which we live now, we should have a better recognition that there needs to be a way to run the Ministry of Defence’s finances that allow it to be more nimble. At the moment, we do not have that. We observe the annuality of bringing the books to account. We do not have a reserve for something short of an awful war.
Nevertheless, we need reserves to be dynamic to deal with things other than war that keep occurring. In the nature of the world in which we live, the delineation between war and peace, home and away, and friend and foe, is about yesterday’s ideas. In the world in which we live, the idea that a country can run its security financially in a way that is not as dynamic as the operating environment will always get into a bit of a mess.
We need to break away from the annuality that says that every year the Ministry of Defence has to spend exactly this amount of money to a pre-agreed penny. That change needs to be built in, or we are tying our hands behind our backs when it comes to an agile response. That is one thing that I would suggest.
You may want to get on to the National Security Council itself. Whatever the mechanisms for intervening reviews, the National Security Council needs to a have a programme of meetings that oversee and direct this constant dynamic management and recalibration in such a way that it can access other monies to prioritise at a given moment.
Lord King of Bridgwater: You said that we ought to have reserves to give us a measure of flexibility to cope with situations that might arise. Is not the reality of recent MoD budgets that, far from having any resources, they are overcommitted before you start?
People have had the conceit, or whatever the word is, that efficiencies are available that have been inadequately scrutinised. It has been politically convenient to believe that they exist, to look as though you have balanced the defence budget. The history of the achievement of those efficiencies has nearly always involved an annual gap. In the years when Philip Hammond was Secretary of State for Defence, he was supposed to have sorted out the mess of the defence budget. That included a number of efficiencies that were not actually achieved. Is that correct?
General Lord Houghton of Richmond: Yes. We are agreeing with each other because the culture of the Ministry of Defence is one born of the reality that if you do not spend it you lose it. You have to spend what you have or the Treasury will take it off you.
The idea that you will be allowed to hang on to it or roll it over happens in reality only in very extreme circumstances. How much better it would be if there were not an absolute observance to annuality of budget, but an ability to veer and haul more between years and have recognised access to some reserves to meet new contingencies as they materialise. So I absolutely agree.
Q7 Baroness Healy of Primrose Hill: Thank you. Taking on board what you said about the optimism of 2015—I think the national mood has since darkened—did the 2015 review do enough to identify key national security priorities in terms of regions and policy areas? I am thinking particularly about the extent to which events since 2016 such as the election of President Trump and the EU referendum have brought the SDSR’s approach and commitment into question.
General Lord Houghton of Richmond: The SDSR 2015, as good as it was in many ways, did not foretell of Brexit. That was not on its mind, not part of the red-teaming of the outcome. It did not foresee Mr Trump, although, to pause on that, many of the policies of Mr Trump were absolutely inherent in the policies of President Obama in the sense of the strategic withdrawal of America. They were just done in a far more genteel way and did not yet rock the boat and get people concerned.
Those were definitely two unforeseen things on the horizon, but we should not have been surprised that some of the latent threats became patent threats with regard to terrorism, Russia or China. All the indicators were there. So it is not right, as a fig leaf of respectability on the MDP and the National Security Strategy, to say, “Suddenly the world has become a very much darker place”. No, the weather forecast was pretty clear that it was getting darker. Brexit and Trump have added to that, but there is a mixed picture.
Q8 Baroness Lane-Fox of Soho: Can we talk about the future and Joint Force 2025. I am interested in how you feel it is going.
General Lord Houghton of Richmond: I could say glibly that it is going all right, but I can give a better sense of that, because looking at what was in your last report this does not appear to be reflected. The only set of Armed Forces that are remotely important are the ones you have today, not the ones you will have in 2025.
The idea of an SDSR is that you make your best guess about what the funded architecture of defence capability needs to be in that sort of timeframe. As you approach 2025, your ambition for it will change. You will stop talking about 2025 and start talking about force 2030. That becomes the new aiming mark for defence capability, and what you hope you have retained is the agility, before you reach 2025, to move on to the next ambition.
That is done always in the hope that the force you have on the day is the one that is generically as close as possible to the capability suite that you need. It is not at all as if we are all waiting until 2025 and that then we will be fine. It is purely a generic headmark that needs dynamic adjustment as we go along.
My personal belief is that if there was a definite capability floor in 2010, that was repeated a little in 2015. However, there is still a tendency to see defence capability through the optic of tanks, ships, planes and the number of bits of hardware rather than understanding that in the world in which we live, the real capability, notwithstanding your people, is in the brain and the nervous system that employs those things. I refer in particular to what we call C4ISR—command, control, communications, computers, intelligence, surveillance and reconnaissance. That is because if there are lessons to be learned from recent campaigns, they are in the intelligence gathering of how and when these things are applied, not that you are necessarily short of tanks, planes and so on.
Perhaps I may unpack this a bit more. Many of the threats that we now face are the asymmetric responses of weak enemies. That is because we comfortably outnumber them, given that NATO outnumbers Russia by 12 to one in conventional capabilities. We should do more and more of our deterrence collectively with allies in NATO with ever greater compromises over sovereignty from nations that know that, in terms of conventional deterrence through NATO, they can do that. We could then devote more money and resources to the new capabilities that we need in order to deal with the asymmetric threats that are, if you like, the new vectors of attack. I include Russia, hybrid war, cyberwar, proxy terrorism, misinformation and all that.
I do not think that we did enough on that in the last review because things had been squeezed out, and where there was a balance of judgment it tended to be the shiny countable things that got the tick as opposed to the nervous system of defence. That is a balanced comment; we did not spend anything on ISR and all that sort of thing. I have a strong personal view about the exploitation of open-source intelligence, which we are still a bit in the foothills of getting our national heads around.
It is similarly the case a little with the cyber threat to the country. Is this broadcast live? If so, I had better be careful what I say. There is still a tendency to thinking of the cyber threat as needing a technical response rather than a defence response, but I am sure that without breaking any secrets we can say that if a state wanted to sponsor a cyberattack at scale as an offensive act, that would need a defensive response. That has elements of building the resilience of the homeland, although it sounds a bit old fashioned. There was some good stuff on this in the MDP, but it is something that we should be quietly accelerating towards. Given the speed of the development of the threat, we have to be very certain that it does not outpace us.
Baroness Lane-Fox of Soho: Do you therefore agree with Sir Richard Barrons’ comment that a complete cultural rethink—I am sorry, those are my word, not his—is needed, a complete refresh in how we think about the structure, or do you feel that it is more about joining up the existing pieces and that fundamentally the nervous system works as opposed to the body requiring a rethink?
General Lord Houghton of Richmond: I know Richard well and I know his views. I actually think that it is a bit of both. The idea of abandoning hard power is a very stupid one. This again goes back to our ambition as a nation. Where do we see ourselves? We are a member of the P5, we have the fifth or sixth largest defence budget, we head the European pillar of NATO and we are the country that guarantees the connection of America.
If we continue to see ourselves in those terms, we have to be a big defence spender on the totemic capabilities of a tier 1 power, and we should not get out of that. We can trade down some things through good alliances within NATO, such as joint expeditionary forces, but here I go back to the Chairman’s first point: defence and security together. The military has so much of a role to play in the security and defence of the country that to separate out those two terms is dangerous, although I can understand why people do it. Therefore we should think ourselves back into our military roles for the defence of the nation not only in cyberspace but for our critical national infrastructure and so on.
That is what the nation pays us to do and what I think Richard is referring to. There needs to be a step change, but it cannot be a sudden abandonment. It has to be done in a strategically coherent way, because in many respects the risk to domestic resilience is probably greater than the risk of the outbreak of force-on-force conventional attritional warfare. You cannot suddenly rip all that up and make it go away, because bad things will happen.
Q9 Baroness Lane-Fox of Soho: Presumably you therefore feel nervous about our capacity to compete on things that remain arguably hard warfare. An example is the use of robotics in the future, sophisticated AI or another kind of big technological leap. I am thinking in particular of the budgets of adversaries such as China, although I am not referring specifically to China.
General Lord Houghton of Richmond: China is a specific issue, because the accommodation of China is one of the grand strategic issues of the day. I would not put Russia in with that. We spend more on defence than the Russians, but they happen to spend their budget in a particularly nasty way and use it on a regular basis without resort to parliamentary discussion. It is a wholly different sort of set-up.
Baroness Lane-Fox of Soho: But do you feel confident that there is enough of a strategic plan but also some tangible capabilities with some of this deep, complex technological development?
General Lord Houghton of Richmond: Within NATO there needs to be far more honest and up-front sharing of all this. The countries in NATO that perhaps do not want to invest in certain parts of it because of national constraints or whatever ought to find other ways of doing it. If you buy into my strategic analysis, the grand strategic challenge of the age is: how do we accommodate the change that is inevitable while maintaining the stability of the world on which the continued betterment of humankind rests?
It is only like-minded countries pooling their capabilities in a way that completely removes sovereign pettiness that will maintain the capability to police and maintain that stability. That will free up enough. That can be done. As I said earlier, NATO outnumbers the Soviet Union 12 to one, but the inefficiencies of sovereign stovepipes actually eliminate quite a lot of that advantage. With the 70th anniversary of NATO coming up, there ought to be a more enlightened approach to making NATO more coherent and fit for its new age purpose, which then allows other nations to spend money better looking at the domestic dimension—the homeland resilience of current-day threats.
Baroness Lane-Fox of Soho: Will the transformation and innovation funds that have been announced go some way to accommodate this forward-looking need to be at the edge of things? From the world I come from, the technological background, you have examples every other week of very small things disrupting on a very grand scale. I struggle to see how you see those things fitting together.
General Lord Houghton of Richmond: I have been out long enough now—three years—that I share your concerns in two ways, maybe three. There is insufficient money going into innovation. The money that is going into innovation is going into the comfortable near-abroad of the defence industrial sector, where, to be honest, there is insufficient connectivity between defence—government or corporates—with the true outliers of new tech.
There are thousands of companies out there, some of which are failing on a daily basis. They have wonderful solutions to all sorts of problems, but they cannot get visibility, and defence and government do not know how to reach them. There are mechanisms out there to link them together, but at the moment too much of the innovation is still an in-house/near-abroad effort that will not get us to the places that we want to get to.
Baroness Lane-Fox of Soho: One final question—I am hogging you. Is this to do with the cultural piece, or is it something more structural?
General Lord Houghton of Richmond: It is a bit of both. It is a lot of both. There is this cultural thing that there are a number of corporates that tend to dominate the defence-industrial debate. Getting to the SMEs is more difficult. I think there are mechanisms out there to do it. I hope that I can help them a bit. I do not come at it from a commercial perspective, more a patriotic perspective, but I think we can do much better.
Lord King of Bridgwater: As we know, a number of countries take a great interest in what is going on in our universities on the research side. They are very keen on some of the sorts of things I think you are alluding to here—they are not the kinds of people you find at DSEI or big defence sales and exhibitions—but they are looking for interesting new developments of one sort or another in the innovation field. Do you think the MoD is doing enough of that?
General Lord Houghton of Richmond: I do not want to hit a broadside when I could not honestly tell you how much the Government are doing. I know there is GovTech. I know that that reaches into some universities. I also know that there are a lot of commercial companies that monitor a whole range of universities to see what research they are doing and which of their programmes they might adopt on innovation streams. But I think it is still done in little bits here and there.
Lord King of Bridgwater: It is one thing to do it from the government point of view, but somebody entirely MoD-focused should be doing that. Do you think they are?
General Lord Houghton of Richmond: They are not going into the universities, as far as I am aware. We go to some SMEs and smaller tech companies, but ones that are established—certainly not the university ones or the tech companies that are still in what they call stealth.
Q10 Lord Hamilton of Epsom: I am very grateful that Alan West is no longer on this Committee and Julian Lewis is not with us today, because I want to talk about aircraft carriers. They were ordered shortly before the 2010 election for good political reasons. There was no money to pay for them. The coalition Government inherited a £40 billion overspend—unfunded spending over 10 years. There was no ministerial override from the Permanent Secretary as the chief accounting officer of the Ministry of Defence. Massive sacrifices have been made in the surface fleet to pay for them, so there are now not enough escorts to escort them. We cannot afford the aircraft to put on them. Do you think, with all the advantage of hindsight, that that was the right decision to take?
General Lord Houghton of Richmond: It was not the National Security Council, so I am not giving away a state secret. When the Chiefs of Staff went across the road in 2010 to get the Prime Minister’s and Deputy Prime Minister’s sign-off, as the vice-chief I said, “I think this is a bad idea. We will rue the day. We cannot afford these things. We will be able to afford them only with detriment to the balance of the surface fleet. The nature of the tasks at the moment demands constabulary policing by our naval elements, not the totemic capabilities of empire”.
Those might not have been my actual words, but the aircraft carriers were deemed to be too totemic, if you like, to Britain’s sense of its place in the world. It would have sent too great a signal of our diminution. For all sorts of reasons, looking ahead, they thought, “No, we’ll carry on with these things. It’s too late to change our mind”.
Of course, it is not black and white. There are a whole range of very good reasons and very good purposes to which you can put carriers and escorts—global projection and all that. It was neither a monumentally bad decision nor a monumentally great one; it was my view that in relation to a wholly military capability against the threats of the day we would have been better spending the money on increasing the size of the surface fleet than on what we did.
That was not the feeling of even other members of the Chiefs of Staff Committee. I cannot say that I was right and they were wrong. Equally, from a political perspective, in terms of national ambition and hard power, that is what they wanted to do. But I believe that a combination of having the nuclear deterrent, two aircraft carriers and the F35B within the defence budget, massively unbalances the amount of money there is to spend on the balance of defence, and its capabilities in a world where many of those capabilities are actually in more active need of use.
People will deploy statistics to say, “We were so committed that it would have cost all that money just to pull out. We would have ended up with no aircraft carriers or ships”. But from a purist perspective it was a great shame to me that we had arrived at the point where we were probably beyond the cancellation of a capability in order to procure a new capability, because it would not have been financially that easy. Equally, do not get me wrong and think that there is no utility in these capabilities. That would be absolutely wrong and I would not commit myself to that.
Lord Hamilton of Epsom: What utility will there be in the aircraft carriers? What do you think they will be doing?
General Lord Houghton of Richmond: They provide a sovereign element of the United Kingdom from which to go anywhere in the world and launch air power. There is a degree to which vulnerability creeps into this through modern-day weapons. I am not a believer in the future of the requirement for decisive maritime engagement of carrier groups, but then China plays into the argument.
In many ways, it goes back to the point I made about the two levers: national risk appetite and national ambition. These two aircraft carriers are an example of the totemic capabilities of a tier 1 nation. China has them, while India has recently been using one of our old ones. I think we could have kept the capability in a more affordable way, and I am not quite certain, looking at the history, why they had to manifest themselves in the way they did, but carrier-enabled power projection is a hugely capable thing and we live in a dangerous time. If it is our political wish to retain that kind of capability because of the sense of ourselves as a nation and the desire to be able to project power in a world that has to accommodate China and all that, I do not decry their utility.
Lord Hamilton of Epsom: Do you think that the Army has basically paid for this project in the reductions in manpower and indeed through losing out on equipment?
General Lord Houghton of Richmond: I do not want to be here as an ex-Army CGS and say that only the Army has had a tough time. However, I think that the state of the Army’s vehicle fleet, while it is not a national disgrace, needs urgent attention. There are lots of vehicles still around that I used when I was a subaltern, and I did 43 years. We should not still have those vehicles in the inventory of a tier 1 nation. The generational change in refits in parts of the vehicle fleet are now being neglected. To an extent, the Army’s armoured fighting vehicle fleet should be in a better condition than it is, and the Royal Navy has done reasonably well out of the programme of late.
I turn to Army numbers. I do not like comparisons with other nations in terms of numbers. We can talk about 82,000 or 78,000, but those numbers cannot be compared with nations whose armies consist primarily of mess waiters and hall porters. If you have 72,000 Jedi knights, you can do quite a lot. They are not all Jedi knights because quite a few of them appear to be off games occasionally, but statistically that is no worse than a Premiership football club. If the club has 17 of its 22 players fit on a Saturday, it is doing quite well. However, we have to be very careful about the critical mass of our people.
In a strange way, the service with the most critical manpower situation is the Royal Navy, not the Army, because ultimately it is pointless spending billions of pounds on these platforms if you do not have the manpower to operate them. There was a small add back of Royal Navy and RAF personnel in the last review, and that was right. I would be very wary of taking the Army any lower, but one of the good things to come out of the 2010 review was the rescue, if you like, of the Reserves. We are still only starting to tap back in to the huge potential that the Reserves offer the nation in the nature of the security context in which we now live. We can call on their active skills on a regular basis—evenings and weekends—to do things that are all part of the effort.
Q11 Tom Tugendhat MP: Most of what I want to ask has been covered, but perhaps we can touch on a small element by going back to the numbers.
You spoke about the meaningful measurement of 2% and you have just touched on the effectiveness of Jedi knights versus mess waiters, which is a very valid comparison. As you look at defence spending, there are two elements to it. You have touched on the point that our economic might, through the training and skill of our soldiers, sailors and airmen, is much greater than that of our enemy, but is it not also true that there is an economic inversion whereby a jihadi with a couple of dollars-worth of fertiliser can kill a British soldier trained at very high expense as well as damage expensive kit, leading to a reverse economic problem? Therefore, would you agree that the 2% counts both ways?
General Lord Houghton of Richmond: Asymmetric enemies who without any sort of legal or moral framework can unhinge you in that asymmetric way are a fact of the nature of the world in which we live. We have to accept that. To an extent, AI, robotics and so on may be able to help, but there is more potential in the conventional form of capability than the “war among the peoples” type of thing where the judgmental ability of highly trained people about the proper legal and moral use of force is that much more imperative.
Tom Tugendhat MP: Perhaps I may pick up on that, because you have spoken about overexotic kit. There could be an argument that if you are using robotics to replace a soldier in danger, you have to construct the legal and moral framework to use those robots. One could see that as exotic kit, but then, as you know well, the presence of personnel, whether they are at sea or on the ground, does actually have a deterrent effect on its own.
General Lord Houghton of Richmond: Tom, I am struggling a little with a response.
Tom Tugendhat MP: Sorry, I should say that I have served under the General’s command.
General Lord Houghton of Richmond: Artificial intelligence and robotics will be all right for certain things, but if you are going to deploy yourself into conflict or stabilisation areas where ultimately human judgment is paramount at the low tactical level, you must have highly trained people to do this and accept that you will lose people to attrition in whom you have invested huge amounts of money.
However, there must be an element of selectivity. There has to be an argument that you are going to get into close-quarters maritime engagement ship on ship, spending billions of pounds on an aircraft carrier and then hundreds of millions on the F35B but less on the actual missiles, but it should be remembered that it is the missile that will have the effect.
We ought to find a way of somehow reversing that and put our money into where the clever bit needs to be, which is at the target end, not the thing that is going in and out of Portsmouth harbour or the airfields at Dishforth and Catterick. I am not being specific to service about that. Given the dynamic evolution we are in, it is the sensors, the technology and weapons effects that we ought to be prioritising when it comes to spend, not exotic platforms.
Q12 Lord Powell of Bayswater: You have talked in the past about the need for agility among our forces from the point of view of Joint Force 2025 to meet the growing expectations being placed on them. Do you think that we are being sufficiently radical, when looking at future strategic priorities, as regards where they should be deployed? For instance, we still seem to be very short of serious ideas for deployment in the Asia Pacific.
The recently defenestrated Defence Secretary spoke a bit about this and caused a certain amount of hilarity. But surely he was right that, looking 10 years ahead, major strategic challenges will be in the Asia Pacific as much as in many other parts of the world. Do you think the time has come to look at that pretty radically in the next strategic defence and security review?
General Lord Houghton of Richmond: I am a little out of date. In 2015, the only fully worked-up regional strategy was the Middle East one. Do not get me wrong; in hard defence terms we had a strategy for Europe and all the rest of it. But with respect to changing our footprint and activity levels, a relatively historic policy—that of withdrawal east of Suez—was reversed in that review. East of Suez, we do have bases. We have a naval base in Bahrain and an airbase in the UAE. We are developing a training base in southern Oman—we have people with the Sultan’s forces—and we have basing rights in Kuwait and those sorts of things.
Part of it is about the reassurance of that region and part is linked to soft power, the prosperity agenda and all that. But at the time of the 2015 review, the Middle East was the only strategy that was mature, up and running and being populated by things. South-east Asia, not so much; you are quite right that, in respect of formalised basing, there is not much happening other than port visits to friendly countries.
Perhaps it goes back to the business of national ambition. But is that all we aspire to do? If part of our national ambition is to be a player, along with America and our allies in Australasia, who can demonstrate to China that we will not allow it to queer the rules-based international order pitch by its activities in the South China Sea, then we should do more. I was party to individual decisions about doing individual things but not putting that on a sustained, strategic basis.
Lord Powell of Bayswater: Do you think this ought to be in the next review?
General Lord Houghton of Richmond: It has to be in there, whether or not we dismiss it because we think it does not fit our national ambition or sensible allocation of capabilities to task on a given day.
One good thing about having a strategically projectable Navy, Army and Air Force is that, to an extent, as long as you have friendly powers in the region, as long as you have an aircraft carrier to project power when it comes to the air dimension, the options are open to you to adapt your strategy to a dynamic context rather than be fixed for the want of having resourced the capabilities.
Lord Powell of Bayswater: Would you say that we should also meet the expectations that the United States might have of us? It would clearly welcome company in the South China Sea—not on a vast scale; no one is talking about basing out there and we would not even be welcome if we tried—but at least in the sense of more activity, particularly given the capabilities you talked about: the aircraft carriers and so on.
General Lord Houghton of Richmond: Yes. There is an incoherence, is there not, if on the one hand we resource what I call the titanic capabilities of the tier 1 power, but are then parochial about their employment. That is part and parcel of what our national ambition is all about.
Q13 Lord Powell of Bayswater: To move on from that, the 2010 SDSR pretty well ignored state threats. They were brought back in 2015 to be taken more seriously. Were state threats the major influence in designing the Joint Force 2025?
General Lord Houghton of Richmond: They were one of the contributing things: the thought that we could not simply abandon conventional hard power because it could revisit us and bite us.
You have to maintain the deterrence posture which then, if you like, forces your enemy into having only asymmetric responses. You cannot hope to deal only with the asymmetric response if you do not invest in the hard power that affects the deterrence. They undoubtedly fed in to the necessity to maintain a sensible level of hard capability.
The Chair: Something has been put to us that flows from what you have been saying immediately and just before about the Navy. It has been put to us that the Army and the Navy appear to be preparing for different wars: the Navy in the Far East and the Army perhaps in Europe.
General Lord Houghton of Richmond: Again, my language on this would not be about being prepared for wars. The idea that your Armed Forces are kept doing adventure training, sport and port visits until the next war completely undermines or misses the utility of Armed Forces that must be actively employed all the time in maintaining the stability of the global commons, or making our contribution to that, even while some of them are sorting out some of these more hybrid and asymmetric threats.
The fact may be that the best tool in the box to project that sort of capability to the Far East is the Navy, while the Army is better exercising in Oman. You dynamically task your assets to cover off your strategy. On a given day they might be operating in two different places because you are constantly employing your Armed Forces in support of a strategy. You are not attempting to think, “What is the war of the moment that they are not fighting in the same place?”
Q14 Lord Harris of Haringey: I would like to follow on from that. You talked earlier about the resilience of the home front, and I refer to your Chief of the Defence Staff lecture to RUSI in 2015 in which you look at some of the composite tactics employed. You say that, “almost all acts of physical violence come with an online component”. You talk about, “combinations of information warfare, cyber activity, counter-intelligence, espionage, economic warfare and the sponsorship of proxies”.
How should the Armed Forces best contribute to implementing the concept of modern deterrence?
General Lord Houghton of Richmond: Deterrence is an enduring requirement for the Armed Forces of a nation such as ours in the context of the world as it is. They are calling it modern deterrence, but a lot of deterrence is actually still quite traditional, retaining capabilities that in concert with allies ensure that certain nations do not misbehave in certain large attritional ways. For example, our deterrence of Russia starts with traditional conventional deterrence.
I have not written in particular or read any doctrine about modern deterrence, but how can you deter for example cyberattack or things happening on the homeland? One way with cyber is to establish offensive cyber capabilities and protocols for revealing them to other countries, which help to ensure that they are deterred from offensive action within a cyber domain. But it will still be primarily the role of military forces to ensure the wraparound of deterrence of offensive military operations. So I am not certain that I buy in to a suddenly different way of having to pull deterrence off.
Lord Harris of Haringey: Okay but could I follow up? You have talked about offensive cyber, information warfare and so on. Is that a military activity, or is it better left to civilian agencies?
General Lord Houghton of Richmond: It is a combination. There is the deterrence of economic sanction. There is cyber deterrence. It is not remotely sophisticated or developed yet, but we are in the foothills of that. The principal form of deterrence is still in the conventional military and nuclear military areas. That is where the majority of the active deterrence of the Armed Forces sits. It is the successful deterrence in that domain that prompts some of these other vectors of attack, if you like. That is why I am not sure I buy in to the concept of a more modern deterrence. It is a classic employment of military capability.
Lord Harris of Haringey: I will shift focus then. We are told that the Joint Forces Command is currently under review. What reforms would improve its ability to respond to today’s more complex security challenges?
General Lord Houghton of Richmond: As you know, the Joint Forces Command came about during the Levene review, on which I was the sole military man. In many respects it was my idea, so I hope they do not throw it out. I will go back to what I said. In 2010, faced with the strategic shock of austerity, as I termed it, the capability decisions reverted to buying platforms—Army, Navy, Air Force.
At the time, and I think this was an error, we did not sufficiently invest in what I then termed the brain and the nervous system of the Armed Forces—C4ISR. Indeed, there were elements of the Army, Navy and Air Force buying CIS systems and IT systems to provide perfect communication within their service, but not cross-communication.
I therefore ventured to offer that you needed a proponent. The Chief of the General Staff, the First Sea Lord and the Chief of the Air Staff were proponents for their services, but there was no proponent for the interconnecting nervous system that brings a joint force together; and you can put into that logistics, special forces, medical, doctrine, and all sorts of other things that were the orphans in the second PUSS’s budget, which did not have a military proponent.
So I said, “Right, a joint forces command should be formed and become the proponent for the enabling capabilities of the joint force”. Take intelligence systems in different environments—the Navy wanted its own, the Army wanted its own, so you had overlapping systems that were duplicative of effort, at a time when we did not have that much money. Joint Forces Command is there to be the proponent of the enabling capabilities of the joint force. I hope that it has stuck to its original purpose. There is a risk, I have heard, that it has turned into what some people call a purple skip, into which if anything does not have a home it is chucked. That is now the joint forces.
In addition, it should not be responsible for recruiting and training manpower; we do not want to start a fourth service. From my limited chats with service chiefs, I understand that they are worried that it is—calling it a purple skip is too strong—losing some of its original core purpose.
We need to grow more joint command and control. The least understood capability which the British Armed Forces bring to bear on any crisis is command and control. Dare I say it, to certain politicians and Ministers it looks like a manpower overhead, because it smacks of being a headquarters. My biggest learning experience was when the then Prime Minister, Tony Blair, called in the Armed Forces to resolve the foot and mouth crisis. He was convinced that we were going to come in and shoot all the animals, dig all the ditches and all the rest of it. I said, “No, we have 25 engineer plant teams. Civil industry has 175,000 JCBs. You don’t need the Army’s 25 plant teams, you need the Army’s command and control organisation to turn the strategic direction of COBRA into appropriate action on the ground”.
Therefore, we sought permission and effected the takeover of the then MAFF by a Logistic Brigade headquarters. That was how we resolved the foot and mouth; it was not because we were bringing in snipers to shoot sheep, it was command and control. Sierra Leone, Ebola—apply military command and control. Olympic security—provide military command and control, and a few thousand soldiers, sailors and airmen. It is command and control and the ability to turn strategic direction into practical action functions through clever people in headquarters who understand these things and communicate rapidly between nodes of command and control activity.
Yet across the whole of defence, the highest level of joint command and control is a one-star brigadier in the Joint Expeditionary Force. That might have moved on. I hope that the direction of travel will continue to improve the integration of command and control for the future force, across all this much more complicated range of potential conflicts, in which it is not just the application of kinetic power but all sorts of soft other powers that need to be orchestrated, because it will be military command and control that can do it.
The Chair: May I modestly observe, as the person who got stuck with clearing up the tail end of foot and mouth, how wholeheartedly I agree with everything you have just said?
Q15 Tom Tugendhat MP: I was simply going to agree with the General. However, I was going to touch on the role of the military presence on the National Security Council and the concept of the fusion doctrine, but that has largely been covered.
The Chair: I was thinking more of the question whether discussions at the National Security Council are sufficiently strategic.
General Lord Houghton of Richmond: First, the National Security Council has been a remarkably good step forward from what there used to be, so I hope that any comment I make is constructive and not seen as being destructive.
But I sometimes make the critical observation that the National Security Council tends to work in only one tense, and that is present tense crisis rather than future tense planning. That is natural, because politics gets pulled in the direction of having lines and actions to take about the crisis of the moment when in truth at least 50% of the National Security Council ought to be doing things like the national capability review and the MDP in an ordered way, without panic, in order to manage dynamically the coherence of the strategy that has been set.
The council needs to balance its activity more towards cohering strategy and future planning rather than simply being swamped by the requirements of crises that seem to arise with horrific frequency in the world in which we live. My experience of it was that it tended to operate primarily in present tense crisis mode.
The Chair: You may be interested to know that you are echoing a point that this Committee has voiced more than once.
Q16 Lord King of Bridgwater: The thing that would worry me about the National Security Council is the length of experience of a lot of the people who are serving on it at the moment. Obviously we have a pretty major crisis, or at least an inadequate situation, in that we have a lot of Ministers with very short-term experience of these things.
To what extent is there a staff back-up of real continuity in people who have seen some of these problems before and have real experience? What you said about having the experience of control and organisation on the military side is something that I certainly bear out because it is true.
Does the NSC have a back-up of experienced people? There seems to be a fashion in the Civil Service to change everybody around every two years to give them more experience, but not to give them continuity of experience. Does the council know how to handle these problems?
General Lord Houghton of Richmond: In many respects, you are right. The National Security Council staff have been brought into being only in the past seven or eight years, but the council is not drawing on a stock of highly seasoned people who have been doing this since day one.
Dare I say it, but we also appear to have opted for a system, by design I presume, for our national security advisers to be, if you like, the managers of the process rather than the challengers. I should say that this is absolutely not about the individuals, but they are not there in the National Security Council to challenge the policy that emerges from Ministers or to offer other courses. They manage the process, the agenda and the outcome, although it might have moved on a bit over the past three years; I do not know.
Do not get me wrong, because there are many good people in the council, but they have been posted in from other areas. I do not think that you should militarise this, but there are lots of people in the military who are quite good not only at crisis management but at strategic planning. I would encourage it to become a more normalised thing for senior officers and certain skilled NCOs to have postings through that. I am not talking about a military takeover, but your average civil servant from DfID potentially knows less about some of these issues than do captains and majors who have been involved in crises and were trained in staff colleges.
The professionalisation of the support team needs to be given some active management, but I cannot comment on the degree to which it is. I know that there are now an awful lot more civil servants and people from the agencies who have come through the Defence Academy of the United Kingdom and go to the Royal College of Defence Studies, and they are now better set up to cater for those sorts of things, but there is perhaps an element of amateurism at the moment which needs to be further professionalised.
The Chair: That is an interesting point. I suspect that one of the reasons why the NSA has ended up as the manager of the process is because they have often been the most experienced person.
Thank you very much indeed, Lord Houghton. We are grateful to you for your time.
General Lord Houghton of Richmond: I hope that I have not upset anybody beyond this room. It was not my intention to do so.
The Chair: I do not think that you have upset anyone in here.
