Thank you Michael [Professor Michael Clarke, Director, RUSI] for that mercifully brief introduction.
I’m delighted to be opening this conference with the First Sea Lord and Julian Miller. I wish I could stay for all of the two days.
My hope is that the next 90 minutes will show not only how inter-connected and volatile the world is - if that was in doubt any longer -but also how inter-connected we are in government in terms of responding to the volatile times in which we live.
We - that is all of us - have common cause.
The Defence of the Realm; the ability to project power wherever our interests are threatened; and securing the prosperity of our nation -and our nation has the sea in its blood and in its history, and which depends on trade now as much as it ever has done in the past.
How we do this should be - and is - the subject of vigorous debate: in government, in the Armed Forces, with industry, with the media and public - and I’m sure that this session will be no different.
All of us on this panel, and I suspect in this room, are united in a belief in the continued importance of the maritime environment in shaping our island-nation’s future.
But if you talk to people outside this room, especially younger people, you are unlikely to receive the same kind of understanding about the implication of our geography or economy.
Ask them about travel and they’ll think of Jumbo jets and Eurostar, rather than cruise liners or ferries.
Ask them about how our consumer society keeps ticking and they’ll think of supermarkets, chain stores or on-line shopping, seldom sparing a thought for how good arrive in the country. And if they do spare a thought, they will think air - and they will generally be wrong.
And ask people about modern conflict and its likely they will talk about guerrilla warfare, IEDs, and precision bombing rather than battleships, submarines, or amphibious assaults and they will only be thinking about half the story.
So today I hope to do three things.
I will to go back to first principles and explain the inextricable linkage between economic power and national security.
I will to set out what this means for the Royal Navy in an inter-connected world.
And I will talk briefly about the role industry will play.
Economic Power & National Security
It used to be the case that people understood that to be British is to be tied to the sea - as a source of wealth and as a source of protection.
Britain rose to global power on the basis of our economic power - underwritten and guaranteed, in large part, by the Royal Navy.
Of course, our enemies of old, our competitors of today, see it differently.
Indeed, if I may be so bold Admiral, they may have a point when they say the Royal Navy was founded on piracy.
This was brought home to me earlier this year when I visited a naval exhibition in Seville and saw many of our seafaring heroes labelled as corsairs and privateers!
Whatever the merits of that argument, we in Britain have long understood the connection between economic strength and national security, and the vital role of Royal Navy, the Royal Fleet Auxilliary and the Merchant Navy in both. But that national memory is fading and it needs to be jolted. So repeating apparent truths with confidence is crucial if our nation does not become completely “sea blind”.
Working closely with the Chamber of Shipping a couple of decades ago showed me not only that the sea protects us, but, as a trading nation reliant on importing goods and, increasingly on imported energy, that the sea is also a crucial artery that helps sustain our way of life and our prosperity.
Today, British shipping earns well over £1 million every hour of every day for the British economy, supports well over a quarter of a million jobs, and generates almost £4 billion each year for the Exchequer.
But with our dependence on primary as well as on finished goods, we have long supply lines to protect.
For example, as a whole, EU countries depend on imports for more than half the energy they consume - indeed, for Germany and Italy it is 60% and 80% respectively.
Though Britain is closer to 30%, it’s a figure which has grown at astonishing rates in recent years and is set to grow further.
And with piracy costing the global economy anywhere between £7 billion and £12 billion each year, ensuring an uninterrupted energy supply from diverse sources and an interrupted flow of goods are major considerations for politicians, especially those in trade dependent nations like this one.
Nor is the sea just a highway.
It holds many resources - energy, minerals and food that in the years ahead, as the technology to exploit them and the need to do so grows, will mean that the competition for resources on land will be mirrored by competition on and under the sea.
The scramble for the resources that underpin prosperity is on.
Impact On Navies
These water-borne arteries most often exist in shared areas which are outside exclusive national jurisdictions.
International law, including the laws of the sea, must be underpinned by methods of enforcement.
And that can only be secured by the capability to prevent, deter, coerce, and ultimately intervene against those who would act against security and stability in the global commons.
When you are looking to project power in this way you can only do so by air or sea.
Power projection by sea has many advantages - a floating piece of sovereign space.
Maritime power is an essential enabler to gain access to and operate in other domains in far flung parts of the world.
It provides choice and flexibility to decision makers as a focus for deploying and sustaining force - with mobility, range and endurance.
As a politician, I can see with great clarity the benefit provided by a naval force in measured escalation without necessarily committing to a footprint ashore.
It’s no surprise that emerging powers such as Brazil, India and China are dedicating so much effort to building naval power.
China sources 80% of her oil imports through the Malacca and Lombok straits.
No wonder the Chinese Navy is undergoing a significant modernisation programme - including her first aircraft carrier - as it seeks to become a dominant regional naval force by 2020, and a global force by 2050.
India too, whose naval dockyards I visited earlier this year, already has the fifth largest navy in the world.
It is committed to a modernisation programme including indigenous nuclear submarines, up to three carriers, with 39 new warships already on order.
Brazil too has a robust programme to modernise its fleet as they look to transition over the next 20 years from a regional power to one with global responsibility.
In this multi-polar, multi-powered future strong British maritime forces - to protect Britain’s interests in the exploitation of marine resources, to enable the projection of power in the air and over land and, alongside our partners, to protect trading routes - will remain a fundamental part of our national security posture.
That is the clear implication of the National Security Strategy and a clear result of the Strategic Defence and Security Review.
The Royal Navy that will emerge from the next decade will be formidable.
The Queen Elizabeth carriers, the Joint Strike Fighter, the Type 45s, the Type 26 Global Combat Ship, Merlin and Wildcat Helicopters, an up-to-date Royal Marine Commando Brigade with their own Merlins, and Astute Class submarines.
All will be leaders in their field and represent the most capable, flexible platforms the Royal Navy has ever had.
We are committed to building the two carriers and I’ve yet to find anyone in the MoD who thinks the decision to switch to the Carrier variant of JSF was wrong.
The new capability will not be the old Carrier Strike we knew.
It will be more like running Heathrow Airport at sea, containing fast jets, helicopters, UAVs, and amphibious capabilities.
On top of this, last month’s commissioning of HMS PROTECTOR reaffirms our commitment to maintaining the Ice Patrol capability.
And we will never forget the work of the ‘Silent Service’ on the Continuous At Sea Deterrence.
I’ve been on these submarines and I know just how dedicated their crews are.
The role they undertake is not only a strategic requirement but is also, I believe, the most cost effective option available for this country’s security in a very dangerous world. It is one that the Prime Minister and Defence Ministers are determined we will maintain.
Which is why we have a successor to the current deterrent submarines through initial gate approval and in the design phase.
Will the next few years be difficult as the SDSR is implemented? Yes - undoubtedly.
The size of the fleet will come down.
One carrier has been decommissioned and another converted to a helicopter role.
The break in carrier strike is one I would rather not have taken.
But re-aligning our Defence posture with economic realities is essential if we want a credible path towards the powerful, expeditionary Navy which we need.
When we settled on an adaptive posture in the SDSR with flexible forces, we couldn’t have predicted how quickly it would be tested in Libya.
But while SDSR may not have named Libya, it did forecast exactly the type of conflict we would be in and prepared us accordingly.
The Royal Navy’s submarines, destroyers, minehunters, and support ships have been invaluable in protecting civilians from Gaddafi’s war machine.
We’ve also seen the first maritime operational use of Apache Attack Helicopters, launched from HMS OCEAN.
Their deployment demonstrates the flexibility of not just the aircraft, but also the Royal Navy’s Response Force Task Group, held at very high readiness for contingency operations around the world.
I must also thank the Italians for the tremendous support they have given us, particularly at NATO’s air operations centre in Poggio and its airbase at Gioia del Colle.
Yes, if we still had operational Harriers and carriers, it is very likely they would have been there.
But Tornado and Typhoon have done all that we have asked of them and more, operating from that land base, just as the SDSR said we would be able to do.
We should remember that in March, Gaddafi was on the verge of crushing all opposition. Now the situation is fundamentally altered. We have destroyed a great deal of his military capability. We have targeted the organs of the regime that are directing attacks on the Libyan people. We have brought humanitarian relief to those who are suffering.
The Libyan regime is now under intense pressure and showing signs of crumbling from within. Every day sees Gaddafi failing to make any headway, while his forces lose further capability. The longer this goes on, the weaker he grows.
So let me be clear - the United Kingdom has the capabilities, the resolve - and the patience - to see through the NATO mission in Libya.
Alongside our partners we are united in our determination to enforce UN resolutions, and will continue to protect the Libyan people for as long as it takes.
Some people have advocated re-opening the SDSR or adding a new chapter in the light of operations in Libya.
But advocates of a new SDSR, or of a new chapter for the SDSR, are - to put it politely - not being wholly straightforward.
What they are really asking for is not a reopening of the SDSR, but a reopening of the cross-Government Comprehensive Spending Review.
As the Secretary of State, Liam Fox, said last week, “Those who advocate this course need to tell us which taxes they will raise, what services they will cut more, or indeed if they would countenance yet more borrowing”.
I am clear that the difficult decisions we have taken in the SDSR were necessary and right.
But the drive for efficiency and value for money isn’t something we think of once every five years in the Defence Review.
It must be part of our DNA in Defence and that include the shipbuilding programme.
We must secure better value for money in the programme, not least through collaboration - for example, with the French on Mine Counter Measures vessels, and with countries like Brazil, Turkey, and India on the new Type 26 Global Combat Ship.
If we can collaborate on our shipbuilding in the same way as we are cooperating operationally with the French navy, we will have achieved a great deal.
And that leads me to the relationship with industry.
The MOD’s Green Paper on Equipment, Support and Technology for UK Defence and Security went out to consultation earlier this year, and I’m grateful to those who contributed.
We’ve been analysing the results, and our aim is to publish our White Paper later this year. I’m sorry that the need to take account of a number of other reviews in Defence has delayed its publication.
Obviously, I can’t prejudge its contents, but I can give some clues.
Many of the challenges we face in acquisition are far from novel and were faced by our predecessors.
I’m indebted to the Financial Times for reminding me that diarist and Navy Secretary, Samuel Pepys complaining about over-manning in the dockyards said, “I see it is impossible for the King to have things done as cheap as other men!”
Well, Bernard Gray and I are working on that. We will reform the way acquisition works. And we will learn from good practice.
There is nothing more established in naval construction than the principle of buying the long lead items in good time.
I’m told the oak for HMS VICTORY was purchased 15 years before construction began.
Looking at the history of British battleships, you soon see that the value of an adapted off the shelf purchase and modular construction is nothing new either.
The utility of an 80% solution over a perfect one has been shown time and time and time again.
Innovation has been a permanent feature of the British shipbuilding industry: making sure the UK has the skills to continue that innovation in our naval construction is vital.
And above all, there’s one lesson from history that we forget at our peril.
In Oscar Parkes’s book, “British Battleships 1860 to 1950”, he writes, “But when the wars were over and we came to size up the eternal value of things, it was not the ships but the men who had won.”
So we must also maintain seafaring skills in both the Royal and Merchant navies.
Britain’s dependence on the sea, and those who serve on it, must never be forgotten. Eternal truths aren’t recognised and understood unless repeated to each new generation.
It’s because of that dependence that we’re committed to building a modern, well-equipped, Royal Navy - able to deliver a powerful punch and a reassuring global presence.
And it means this Government understands that the proud maritime legacy of this country, of which I am so clearly and proudly aware, points unequivocally towards a positive and resilient future for UK naval power.