Thank you for inviting me here to speak to you.
And as you approach the end of your course I know you will have made the most of the opportunity presented here at the Royal College of Defence Studies to get to grips with some of the very complex issues facing defence and defence diplomacy.
Many of which are common to the United Kingdom and its allies and partners.
The international nature of this course is one of its strengths.
And your generation of leaders will have a key role in addressing these challenges; and in forging the bilateral and multilateral defence relationships that the defence and security arrangements of every country, even the United States, is likely to rely on in the future to protect its national security.
So I want to talk this morning about some of the strategic challenges we’re facing in UK defence and more widely.
And pose you some of the questions that will have to be answered during your generation’s tenure in the top jobs.
Strategically, the world is a far less certain and, in some ways, a less threatening place than it was 25 years ago.
Then we faced an adversary with the means and the intent, if an unpredictable and paranoid leadership.
Nowadays at least the paranoid leaderships are still struggling to obtain the means!
More broadly technology is racing ahead; changing the way we protect critical infrastructure more likely to be rendered inoperable through a computer virus than a bombing raid, requiring multi-level C4ISTAR; capabilities which are not as obvious to the public as an aircraft carrier, a tank or a jet.
The rise of ‘invisible’ capabilities like this presents a challenge to politicians who need to demonstrate to the public who are paying for them, how we are spending their money and how we are keeping them safe.
At a geo-political level, the dispersion of power that began as the Berlin Wall crumbled has gathered pace with the emergence of new potential military powers and greater strategic competition between growing economies, both regionally and globally.
Alongside this, the impact of globalisation means there are diminishing levers available to individual national governments to effect change, manage their economies, and protect their national security.
The economic realities facing the mature economies show how linked we are; how easily contagion can spread.
In the medium term, those charged with the task of protecting national security, in economies set for relative decline as the pattern of wealth adjusts, will have to do so in an environment of constrained resources
This is the future in which you will lead in your respective services and in your respective countries.
And although this future will be unpredictable and volatile, we can clearly see some of the issues that will dominate.
First, the economic backdrop.
Economic strength underpins national security.
It is a requirement for generating military capability.
Look at what is driving the changed pattern of military power today.
Look at what settled the Cold War.
Without strong economies and public finances it is impossible to build and sustain, in the long-term, the military capability required to project power and maintain strong defence.
That is why, today, the debt crisis should be considered the greatest strategic threat to the future security of western nations.
And it is also why, although NATO has often talked of distributing the burden of collective defence more equitably, in the current fiscal climate, it is essential that we no longer talk, but begin to act.
The reality is that too many member states are failing to meet their financial responsibilities to NATO, and so failing to maintain appropriate and proportionate capabilities.
Too many are opting out of operations or contributing but a fraction of what they should be capable of.
But we have to be realistic.
The economic and fiscal circumstances in which most developed countries find themselves makes this problem difficult to fix in the short term.
Across the alliance, aggregate defence expenditure is certain to fall in the short term and, at best, recover slowly in the medium term.
So more money is not going to be the answer.
So, the challenge is to maximise the capability we can squeeze out of the resources we have available.
Which brings me to my second point: alliance structures are only as strong as the political will of individual nations to meet their responsibilities.
It matters that NATO countries meet their commitments on funding defence, to ensure the means to protect our collective security.
But it is no good having the means if you lack the will to use them.
Libya showed what can be achieved when many of the stars are in alignment:
The UN Security Council, NATO, regional powers, the political will of those with the capabilities to act, and of course the will of the majority of the Libyan people.
But it also showed quite starkly the imbalances in NATO.
Imbalances in the hardware (and increasingly software) available to the alliance from national contributions.
But also imbalances in the will to act, the will to deploy, the determination to take part and commit nationally owned capabilities that have absorbed many billions of taxpayers’ cash in order to make us all collectively safer.
There are untapped reserves of resource in European NATO which need to be tapped to support our collective security.
Over the next few years, the United States will put into practice its ‘tilt’ to the Asia-Pacific theatre, a focus that is very much in our interests as the US rise to meet the strategic challenge set by the emergence of China.
The US will expect Europe to do more to of the heavy lifting to ensure security in our own region, and our near abroad: the Middle East, North Africa, and the Horn of Africa.
How European nations respond to this pivot will set the context for the multilateral environment British armed forces and others will operate in.
This brings me to my third point: cohesion of purpose.
We need to confront, head on, a real tension within the NATO alliance: basically to answer the question, what is NATO for in the 21st century?
The threat from a monolithic Soviet Union no longer exists.
And the approach to Russia differs across the alliance.
For those of us further back, west of the old iron curtain, the threat is no longer territorial, but global terror and rogue states.
So a passive defence of national territory is no longer adequate protection for our citizens.
We are starting from a reality that it is much better to fight in the space of our adversaries rather than at home.
Of course this is relatively easier to do if your adversary is a terrorist, rather than a state.
And this requires rapidly deployable, adaptable, agile, flexible, expeditionary forces.
So this is what the UK’s strategic defence and security review was all about; responding to these 3 drivers: the economics, the evolving alliance pattern, and the evolving threat pattern.
Shaping the spread of capabilities we will maintain, in the face of fiscal restraint, to the future character of warfare, and to maintain national security by acting at distance.
The future posture of Russia is by no means certain.
And with political change sweeping across North Africa and the Arab world, change that is far from at an end, far from predictable, and has the potential to leave a less secure and less safe neighbourhood, we cannot rule out the return of a strategic threat to territorial Europe.
So this has been about striking the right balance between our own direct national needs and those of the NATO alliance upon which we continue to rely for collective security.
And recognising the likely future shape of operations in that context.
The future shape of operations
You will have had the opportunity during your course to look at current operations and to draw lessons from them for the future character of warfare.
Libya showed the utility of precision weapons in an era where minimising collateral damage and civilian deaths will be part of the strategic objective.
And it also exposed shortfalls in the European contribution to NATO.
But Libya has tested another concept.
The utility of air power as an alternative to ‘boots on the ground’.
Libya has shown how air power can provide politicians like me with political choices short of intervention on the ground.
But I have not drawn the conclusion that ground intervention will be unnecessary in the future.
There was a ground campaign in Libya;
It could not have proceeded without NATO airpower support.
But it was decisive.
And it was undertaken by Libyans, not NATO troops.
After 10 years of enduring campaigns, you do not have to be a political sage to recognise that the public’s future appetite for open ended interventions is limited.
Of course, we do not yet know the end outcome of the Libya intervention.
Displacing the old regime was, relatively, the easy bit.
And what comes after is not yet completely clear.
So modern warfare requires firepower and political sensitivity;
And that requires a deep understanding of the situation on the ground.
In Afghanistan, our troops have had to wear the face of both the warrior and the diplomat, fighting one moment, and taking tea with the elders the next.
The political dimension of warfare is crucial to success.
You can win the battle but lose the war unless you are focussed on what you really want to achieve.
And it will usually be the case that force of arms alone cannot deliver victory.
That is certainly the case in Afghanistan.
That is why the comprehensive approach, marrying politics, finance, military capability, diplomacy, development, not just across national government, but internationally too, will be so important in the future.
So, against that backdrop, let me bring this discussion closer to home and say something about the future shape of the UK’s armed forces.
The future shape of UK armed forces
Afghanistan is still very much the priority in terms of operations.
But the end of the combat mission is now in view.
And, intellectually, we have moved on to look beyond 2014 at the shape of the forces we will need for the future.
The needs of the mission in Afghanistan, and before it Iraq, have dominated for a decade.
For all the dangers and complexities of those missions they have provided some predictability.
People have known, often 2 years in advance, when they are going to be deployed; they know how long they are going to be deployed for; often they have known exactly where they are going to be deployed to before they go.
We have bent our military, our army in particular into the shape required for this 6 month rotational enduring conflict in Afghanistan.
But, in the process, we have lost some contingent capability.
Post 2014, the move from enduring campaign to contingency signals an end to the predictability of the roulement cycle;
It heralds a future force geared toward being ready to deal with the unexpected and unplanned.
And we make this change against a background of fiscal constraint driven by the economic health of the country as a whole, and the legacy of mismanagement in the defence budget in particular.
The transformation we are undertaking is challenging, probably the most complex change programme being undertaken anywhere in the western world at the current time.
The black hole that existed in the defence budget, the weakness of the equipment programme, and the shape of the country’s finances, have militated against simply bailing the budget out.
It would be hard to justify excluding the defence budget, the fifth largest call on the public purse, from the programme to exert fiscal control.
Balancing the books and creating a sustainable forward defence programme has meant reducing personnel numbers, retiring some capabilities, and taking some calculated and managed risks.
But as I told an audience in Washington last week, it is far better to have a smaller but well-equipped and well-trained force; with an equipment programme that offers a high level of confidence that we will deliver it; giving our armed forces the ability to plan for the future.
With the announcements I have made over the last couple of months on the defence budget, the equipment programme, army 2020 and the reserves we have put in place the vision set out in the SDSR of sustainable armed forces, equipped with some of the most capable and most technically advanced platforms in the world, configured to respond to the unexpected and to go anywhere to do it.
And we have also set out a blueprint for the reform of the management of defence:
Renewing the way strategic direction is provided;
Pushing authority and accountability down the chain of command;
Encouraging innovation and budgetary responsibility;
And developing a new strategy for the procurement of defence equipment.
Seeking to instil private sector skills and disciplines to our acquisition process, driving up productivity, by bringing a private sector partner into the process.
And creating clearer and harder relationships between the different functions in the defence procurement chain.
To read some of the comment in the media, often fuelled by retired officers whose view of the world was shaped in the Cold War era, you would think that Britain was getting out of the force projection business altogether.
Nothing could be further from the truth.
Even when this programme is complete, we will still expect to have the fourth largest defence budget in the world;
Exceeding the NATO standard of 2% of GDP;
Spending £160 billion on our equipment programme over the next 10 years;
Delivering the next generation of military technology and platforms that will help provide a battle-winning edge;
So this is the picture:
Smaller armed forces, but better equipped and confident that they will receive the equipment that has been promised;
Agile, high-tech, capable of conducting the full spectrum of operations;
Structured to allow rapid reaction and expeditionary warfare;
Able to deploy overseas and sustain a brigade-sized force indefinitely, or a division-sized force in time of need.
Able to command in the coalition context and more interoperable with our main allies;
Fully integrated between regular and reserves, with predictable obligations for the reservists that will require a real commitment to service;
And a more systematic use of contractors for support and logistics; allowing greater focus of military manpower on fighting tasks;
And, crucially, structured to be able to generate mass and capabilities if the threat picture changes or the fiscal position eases.
These are the British armed forces that some of you will be leading in, or for our partners overseas, the British armed forces you will be operating with.
And many of you who are from overseas will be seeing similar transformations in your own militaries over the next few years.
All of you are here because you have been identified as having the qualities needed for top level responsibilities.
You know that the moral component of leadership is one of the most important.
If this transformation is to be realised, and national and collective security to be guaranteed, you will need to be focussed, positive, full of ideas, prepared to change, to challenge convention, and willing to drive change in others, inspiring those around you.
And there is a challenge at a political level too, for people like me.
As Secretary of State, I have responsibility for defence but as a cabinet member, I have responsibility to look wider and help to balance national priorities.
When an immediate or existential threat shrinks, the public appetite to fund defence shrinks with it.
We are lucky in the UK, particularly compared to other European nations, that the public feels a strong affinity with our armed forces and has a greater inclination to give defence a higher priority than many of our neighbours.
But the legacy of Iraq and Afghanistan has undoubtedly left us a public which is without appetite for enduring campaigns.
And politicians need to think carefully about how we are going to maintain public support for defence spending in the years ahead;
Especially when more and more of the capabilities we are investing in will not be traditional military assets, and indeed will often be invisible to taxpayers.
There are many actions in hand to manage the transition from a period of enduring campaigns to one of contingent readiness; and I have described a few today.
But we have answered by no means all the questions:
Questions about the future focus of NATO;
About how we maximise the military effect that we get from limited budgets across the alliance;
About the balance of capabilities between traditional kinetic effect and investment in C4ISTAR, cyber and space;
About the type of warfare we need to prepare to fight;
And about the future of European defence industries in the face of rapidly changing export markets and shrinking domestic purchasing power.
These, and many other questions, will form the challenges that the next generation of military and political leaders will face over the coming years.
And I look forward to hearing your thoughts on them!