SSAFA annual defence industry dinner 2012

Speech by Philip Hammond, Secretary of State for Defence.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government
The Rt Hon Philip Hammond


Thank you Kevin [Sir Kevin O’Donoghue, SSAFA Chair] for that introduction; and for your kind invitation to make the address this evening.

Your Royal Highness, Chief of the Defence Staff, my lords, ladies and gentlemen, it’s a great pleasure to be back here at SSAFA’s annual dinner.

When I spoke at the annual dinner last year it was my first speech as Defence Secretary.

After just days in the job, I was confidently asserting all sorts of things with very little direct personal knowledge of whether they were true or not.

One year on, a little more au fait with the military jargon, and a lot more familiar with the challenges facing our troops and their families, I can pay full tribute to the vital work that SSAFA does, based on a personal understanding of the need you are meeting and the difference you are making.

Just last week, I heard at first hand at Queen Elizabeth Hospital in Birmingham how facilities such as SSAFA’s Norton House allow visiting families to focus their energies on their injured loved one without having to worry about finding and paying for accommodation close to the hospital.

Across the range of activities, outlined by the Chief of the Defence Staff earlier, the work you do is hugely appreciated and highly valued.

So, on behalf of all of us in defence, let me say “thank you” to you and the industry who support you so magnificently, for everything that you do.

It is one year to the day since my first day in office.

There’s an old civil service legend that’s told about Sir Alec Douglas-Home when he was appointed Foreign Secretary under Ted Heath.

In his first weekend box, he was confronted with a 2-inch-thick report on Icelandic fisheries and a note from his private secretary, which read:

The Secretary of State may care to read this over the weekend.

Sir Alec returned the report the following Monday with his own note, saying:

A kind thought, but wholly erroneous.

Before I arrived in the MOD, I had been prepared for the worst: a stereotypical bureaucracy seeking to frustrate ministerial intent at every turn.

But I have to say, my experience has been very different.

Coming into a department as complex as defence has been quite an eye-opener.

I certainly wasn’t appointed because of my knowledge of fighter jets or aircraft carriers or armoured vehicles.

And, if I’m honest, I probably came into the department with a focus on the budget challenge.

I quickly understood that, while the budget is crucially important, defence is about much more than a set of balanced books.


On my first day in post, one of the first duties of my military assistant was to inform me of the death in Afghanistan of Rifleman Vijay Rai of the 2nd Battalion The Royal Gurkha Rifles, and to explain to me the process of kinforming and repatriation.

That was a very sober introduction to my new responsibilities.

And to the reality of our operations in Afghanistan.

Those operations remain, of course, the first priority of the department.

As we come towards the end of our mission there, it’s important for us to remind ourselves why our troops are there; how much they’ve achieved; and how we are going to get them out.

The reason we are in Afghanistan is simple: to protect our national security.

That is the only reason, in my book, to ask our troops to put themselves in harm’s way.

The plan is clear: training the Afghan forces to take on the burden of security so that we can bring our troops home while ensuring the gains that we have made.

And coming home they will be: another 500 by Christmas, and we expect to make further, significant reductions by the end of next year, with all UK combat operations finishing by the end of 2014.

Balancing the budget

As we move towards the end of our mission, we need to plan now for the post-Afghanistan environment and the transformation of defence to meet the challenges of the future.

The past year has been dominated by the urgent need to eliminate the black hole in the MOD budget; to learn lessons from the failures of the past; and to ensure that our forces are prepared for the very different challenges they will face in the future.

That has meant taking some tough decisions: to shrink the size of the MOD; to rationalise our equipment programme; and to reduce the size of the navy, army and the RAF.

Half-way through this Parliament, we now have a balanced budget with an affordable equipment programme and a deliverable plan Future Force 2020, backed by what will still be the fourth largest defence budget in the world.

People: the future of our armed forces

Balancing the budget is crucially important, but it is not an end in itself.

It’s a means to enable us to deliver, sustainably, the defence of this country.

And the key to doing that, what really delivers Britain’s battle-winning edge, is the people that make up defence.

The men and women of our armed forces, regular and reserves; the civilians who support them and the defence industry which supplies them.

One of my big learning curves over the last year (and there have been a few) has been understanding the unique nature of what the military call the “moral component” of defence.

What it is that provides the “will to fight”, and the determination to win.

What makes our people so special.

I know that many of our people feel they have taken a bit of a pounding over the last couple of years.

And I also know that I have got a big job on my hands to build their trust and win their confidence.

Having fixed the budget problem and begun the process of transforming the department, it is now time to focus on our people, and their needs.

So while I cannot avoid the need for change, what I can do is give people clarity and certainty about their individual futures as quickly as possible.

We’ve already completed the armed forces pension review.

Delivering a new, non-contributory scheme that remains one of the very best pension offers anywhere in the public or private sector.

Before the end of the year, we will announce the re-basing plan, so that families will know where their future homes will be.

And we will do everything we can to minimise the number of compulsory redundancies as we bring the army to its future size over the next couple of years.

I also know that our service men and women want certainty that at the end of these changes, they will be part of UK armed forces that remain amongst the very best and most respected in the world.

While many countries will have more people in their armed forces, and some may even have similar equipment, very few will be able to begin to match the military capability of our people.

At the end of this process of transformation, I am confident that we will have the most capable, deployable armed forces outside the United States of America.

Strengthening the covenant

I also want our servicemen and women to know that the government and society as a whole recognises the debt of gratitude we owe to them and their families.

That is why we have enshrined the key principles of the armed forces covenant in law.

The covenant is now becoming entrenched across Whitehall, so much so that ministers in other departments are now coming to me asking how they can do their bit to support our armed forces:

The Chancellor, with £35 million from banking fines redirected to service charities;

The Education Secretary, increasing and extending the scope of the service pupil premium;

And across government, a commitment to give reservists a minimum 10 days’ additional paid leave each year for their training.

I am proud that upholding and strengthening the covenant is taken so seriously across government.

We have more work to do, but the process is now irreversibly established.

The year ahead

In the year ahead, as well as the proper priority that we will give to our operations in Afghanistan, we will make progress on 3 important parts of defence transformation.

First, working to build our new reserve capability and integrate the reserves with our regular forces.

In the coming weeks, we’ll publish our reserves green paper, setting out our new offer, backed by an additional £1.8 billion.

In return for properly equipping, training, and funding our reserves we will expect them to turn up regularly to train, and to be prepared to deploy.

Despite thousands of them having served in Afghanistan and operations around the world, too often our reserves have been the forgotten part of our armed forces.

No longer: in the future, they will be more vital to our force projection than ever before.

And we will treat them as such.

Second, we will accelerate work on the new employment model.

Making service terms and conditions more flexible, better reflecting the complexity of modern family life and delivering our goal of higher levels of home ownership among members of the Armed Forces.

And third, restructuring our equipment and support acquisition, bringing in private sector management skills to support the military and civilian specialists who form the backbone of DE&S.

I am determined that the MOD will be a much better customer in the future: an organisation with which the defence industry can do business far more efficiently.

And in return, we need the industry to be leaner, more cost-conscious suppliers.

I know that with shrinking defence budgets in many countries, it is a tough environment out there.

But by working together to create the equipment our armed forces need, at a cost we can afford and at a price that makes it exportable, we can continue this country’s proud tradition of excellence in defence manufacturing.


The last couple of years haven’t been easy for anyone in defence, least of all for those in our armed forces.

But with the budget back in balance and the bulk of the tough decisions taken, we can now look ahead to the future with confidence:

Handing over security in Afghanistan to the Afghan;

Transforming our armed forces for the future;

Building the battle-winning platforms and weapon systems our forces need;

Reforming procurement;

And building our integrated reserves.

But most importantly, we can begin the process of rebuilding confidence in the future among our people after years of uncertainty and change.

That is a challenge for me and for the department, indeed for the whole of government and society as we build on the commitments of the covenant.

But it is one that we will be hugely better able to rise to with the magnificent support of the fantastic service charities such as SSAFA and your generous supporters.

Thank you again for everything you do, and please, keep up the good work in the future.

Thank you.

Updates to this page

Published 15 October 2012