Q4 Lord Hamilton of Epsom [former Armed Forces Minister]: We used to have Defence Reviews. The problem was that you made assumptions about what was going to happen. I was not there for the Falklands, but, as you know, the Defence Review before the Falklands was going to get rid of the carriers, and if that had gone through we would not have been able to retake the Falklands. Tom King is not with us. He got up and announced ‘Options for Change’. He did say that we had to be ready for the unexpected, and Saddam Hussein invaded Kuwait weeks later, on which we had no intelligence whatever. Does it not worry you that you make these assumptions, which you put into these Reviews, and they all turn out to be wrong?

Sir John Sawers [former Chief of the Secret Intelligence Service]: Certainly you have to build capability for a great deal of uncertainty in the world, but you cannot have a capability against every conceivable threat. You somehow have to prioritise the threats that you perceive and assess the intent of those who might want to do you harm, as well as their capabilities, against your own priorities. You need a rational approach to it while having a very sober and humble approach to the fact that you cannot predict the future.

Robert Hannigan [former Director of GCHQ]: I would add that the four challenges outlined in 2015 are still the right ones. The context has changed, in the way in which John and Peter [Ricketts] have described, but they are not the wrong challenge now. I agree that we will always miss things. We probably collectively missed the rise of Daesh, and that is true not just in this country but in the US. You have to make some assumptions, and if you do not you end up with what happened in the previous strategy in which we talked about having a “flexible posture”. The danger of that is that it can mean almost anything.

Lord Ricketts [former National Security Adviser]: May I quote Eisenhower to the Committee? Eisenhower said: “Plans are worthless, but planning is everything”. Going through the discipline of these Reviews is useful, even if it cannot be predicted exactly what will happen the following year.

Q5 Dr Julian Lewis: Something could be said for prioritising threats if we had any sort of track record of accurately predicting them, but the reality is that the vast majority of conflicts in which we were engaged throughout the 20th century – and there is every sign that this still applies – were completely unpredicted. Surely the approach, especially when you are dealing with military affairs, has to be to construct your armed forces in such a way that they are flexible and capable of regeneration rather than trying to say, “We don’t think this or that particular sort of threat will materialise, so we will get rid of an entire capability” – such as our amphibious capability, to pick one example out of the air. Is that not the case? Prediction has been absolutely hopeless, has it not?

Sir Adam Thomson [former UK Ambassador to NATO]: It is right, as Robert Hannigan has just said, to do your best to predict, even if you recognise that you are going to be wrong. The key, as you say, is to give yourself a range of capabilities. There is a risk in national security strategising that you go with the fashionable issue of the moment and put too many eggs in one basket. I am a little concerned that that is what we are seeing at the moment in identifying Russia as the top state-based threat. While I was at NATO you could see the pendulum visibly swinging from expeditionary back to a Cold War capability, and it may swing too far.

Sir John Sawers: I would not be too harsh, Dr Lewis. It has been predicted in successive Reviews that we would face terrorist attacks and cyberattacks, and we needed to have the capabilities to deal with this. Whether the war was going to be in Iraq, Syria, Libya, or wherever, you could have had a different view on it, but the likelihood of there being some break-up of dictatorships in autocratic parts of the world was also quite likely. We could well have got drawn into that and we had the capability to deal with that. It is not about predicting which countries will collapse or which two countries are going to end up in a state of hostilities with each another. As you say – and I think your conclusion is right; it is just your premise that I disagree with – you have to build capabilities. That is why it is called a Capability Review.

Dr Lewis: It was very easy to predict that there were going to be terrorist attacks after 9/11. The interesting thing was our total failure to predict terrorist attacks on any significant scale internationally before 9/11. It took the world’s only superpower completely by surprise, just like the Yom Kippur war took Israel by surprise, just like the Falklands war took us by surprise, and just like the invasion of Kuwait took everybody by surprise. It is brilliant trying to predict these things, is it not?

Lord Ricketts: What you are really saying, I think, is that the future is unpredictable.

Dr Lewis: Yes, absolutely.

Lord Ricketts: So you need capabilities that are flexible and adaptable.

Dr Lewis: Exactly.

Lord Ricketts: I remember the slogan from our 2010 SDSR: “an adaptable posture”. It is not just in Defence either. The British Intelligence community has shown itself remarkably adaptable to dealing with threats arising in unexpected places and geographies and of unexpected types. Maintaining capabilities that can be switched as the threat changes is fundamental.

Q6 Lord Campbell of Pittenweem [former Leader, Liberal Democrat Party]: It is quite difficult to see how you budget for this approach, because if you have to have your mind open to any possibility rather than prediction, how do you find a financial basis upon which you can argue for priorities within overall government spending?

Lord Ricketts: It comes back to Lord Powell’s point that the Government are part of the overall process of dividing up the available taxpayer money and have to decide what priority they give to Defence and other areas such as Health, Education and everything else. It is up to the National Security community to make the most of that.

Lord Campbell: One of the criticisms of the 2010 Review, as you will recall, was that the Ministry of Defence, Dr Fox and Nick Harvey were given an envelope of money and told, “Go away and construct a policy within that sum”. If you are not going to make some effort at establishing principles, it seems to me that is almost inevitably the way you have to do things. I would make one other point. It seems to me that resilience in this context is hardly ever mentioned. We went into Afghanistan. At that time, if I remember correctly, the Robertson mentioned one major action. The second action was peacekeeping, or something of that kind. In the end, we found ourselves fighting in much more severe and, in terms of duration, much more demanding activities. How do you factor that in?

Lord Ricketts: Can I come back to you on the question of money? If you are doing Strategic Reviews, whether on Defence or more widely, you have two choices: either you do them in the knowledge of roughly the amount of money you have or you make your strategy and go to Government and say, “Will you fund it whatever it is going to cost?”

Lord Campbell: That is the classic definition. Lord Ricketts: Neither works. In both 2010 and 2015 the SDSR and the Spending Review ran alongside each other. Defence was not just given an envelope of money. As far as I remember, there was quite a lot of interaction in the last month or two to come out with an answer that was acceptable just about to all sides. Strategic Reviews have to be informed by the amount of money that is roughly available, otherwise you are in a void, and I think that is inevitable. Of course, it is not entirely satisfactory, but nothing is in this world. On resilience – and others will have views – I agree that we need to plan for it in everything that we do. In my view, that is another reason for not separating off the consideration of Defence capability from the other capabilities, including DfID, that are essential if we are going to have resilience in long-term operations.

Q7 Dr Lewis: Very briefly on money, I am sure you all remember that during the 1980s when we had a combination of a very assertive Russia and the IRA terrorism campaign, we were spending between 4.5% and 5.1% of GDP on Defence, but do any of you remember what percentage of GDP we were spending on Defence in the mid-1990s after we had taken the ‘Peace Dividend’ cuts?

Sir Adam Thomson: It was above 3%.

Dr Lewis: It was exactly 3% in 1995-96. Now that we are facing a renewed and intensified threat, it is hardly surprising that a Review of this sort breaks apart when the Defence element is spending barely 2% –  less than 2% on the old method of calculating it – and we are told that, because there is ‘fiscal neutrality’, intensified threats in other parts of the security domain will result in the loss of major conventional Defence capabilities. That is an untenable situation, is it not?

Sir Adam Thomson: Maybe that is why – I speculate here – the Modernising Defence Programme has just been separated out from the National Security Capability Review. I maintain my point that although it is a different one it can make perfectly good sense to look at whether within a fiscal envelope the mix of capabilities is right against a fast-changing external picture.

Robert Hannigan: At the risk of making it sound even worse than you describe, the other factor –  

Dr Lewis: I have done my best.

Robert Hannigan:  – is the technology. This was identified in the last Review, and it makes it exponentially more expensive for Defence. You are getting less for your money. It is a little like Health inflation; Defence inflation is behaving in different ways.

[ … Q20 … ]

Sir John Sawers: Can I step back a little from this Russian discussion? We have all dealt with Russia in different ways for many years. It is a difficult country to deal with. They feel themselves to be under pressure from the West. They will seek advantage where they can and they see the world largely in a zero sum way, so they believe if they can do damage to the West that is a net benefit for Russia. They are also quite reactive. I do not believe that President Obama managed Russia particularly well during his eight years as President. Had Russia and the United States had the quality of communication that we had in the 1980s and 1990s, I do not believe the Ukraine crisis would have got out of control in the way it did. Had we upheld international standards on chemical weapons and intervened in Syria, we would not have left a vacuum for Russia to intervene in that country. They are not 10 feet tall. They know how to use the room for manoeuvre that they have, but they find it hard to sustain over a long period, which is one reason why they are trying to extract themselves from the Donbass in Ukraine and from Syria.

It is really important that we remain engaged with Russia. Being engaged does not mean being nice to them. It is a vehicle for having tough conversations. I have had many tough conversations with Russian counterparts over the years, whether in the Foreign Office or at the United Nations. Unfortunately, I was not able to do it as Chief of Intelligence, because we had a ban on communications between British and Russian Intelligence. The Americans, the French, the Germans, the Italians and many others have quite established channels of communication and occasional exchanges of Intelligence with the Russians. They all get value out of them, but we are unable to do that. We need a form of tough direct clear-headed engagement with Russia in order to ensure that there is proper understanding between the two sides. We have sort of developed it over Syria now, because Western forces and Russian forces are operating in the same theatre and we have to go to great lengths to avoid a clash between the two. Frankly, had we had that level of communication with the Russians over much of the last 10 years, some of the activities that we have seen the Russians involved in may not have taken place, certainly not in the same way. That said, if we have a political system that is vulnerable to being exploited from outside, yes, the Russians will try to do that, so we have to close down those vulnerable flanks to make sure we do not expose those vulnerabilities.

Tom Tugendhat [Chairman of the Foreign Affairs Committee]: Would you argue that the rising oil price makes them more or less likely to engage, Sir John?

Sir John Sawers: The Russians have shown a willingness to engage with western countries. I do not think that is the problem. I am not sure the oil price makes a huge difference here and I would not bet on it remaining high for long.

Robert Hannigan: I agree. It is important to remember that, viewed from Moscow, the internet looks like a US-owned strategic advantage for the West in that the West has its arms around it, and it feeds the paranoia that is already there about a grand conspiracy against them. I tend to agree on the Obama Administration. A combination of humiliating Putin and not sticking to red lines, for example over chemical weapons, was pretty disastrous. It is not as if everything was great for the last 10 years, and I think we are paying the price for that.

Dr Lewis: I detect a view that it is possible both to stand up to Russia where our interests clash and to co-operate with Russia to some degree where our interests might coincide, as with, for example, in opposing ISIL/Daesh. I have to say with respect to Sir John’s point about Syria that, if we had done in Syria what we did in Libya, we would have lived to regret it. I am looking at the Secretary of State’s interview with the Daily Telegraph on 26 January in which he had harsh words to say about Russia. We have here three singularly well-qualified people, two at least [Robert Hannigan and Sir John Sawers] very much from the secret world, who would be able to confirm, I hope, what I see on reading this article, which is that there is no question of any classified information having been leaked in the course of that interview.

Robert Hannigan: I have not read the interview, but I saw the headlines on the BBC. It did not strike me that there was classified information in there. It seemed to me that the Secretary of State was saying in the interview that the risk of miscalculation by Russia in its interference in a critical national infrastructure, particularly of power, might lead to the deaths of many people. I think that is a perfectly respectable thing to say. It is worth remembering that so far we have not seen anyone physically harmed or killed through cyberattack, but I think it is just a matter of time. If people take reckless gambles inside power grids or in hospitals, for example, it is almost inevitable that at some stage somebody will die as a result of cyberattacks. It did not seem to me from the press reporting of the interview that there was a suggestion that there was a Russian plan to kill thousands of people, but I have not read the article.

Sir John Sawers: If you want a serious answer to that question, you will need to get the Intelligence and Security Committee to ask the head of GCHQ in a private session.

Dr Lewis: Surely, with your experience it is very straightforward to identify in the article what he is talking about as possible attacks on undersea interconnectors for electricity and gas. There is nothing there that has not been said by other senior figures in the military world, is there?

[Sir John Sawyers made a non-committal gesture.]

Dr Lewis: Is that a yes or a no?

Robert Hannigan: The Russian capability is certainly widely discussed – I have discussed undersea cables myself – in the US and here.

Dr Lewis: I served on the ISC for five years and I think I know what might conceivably be classed as classified and what might not. I thought this was a good opportunity. If you have not all read the article, you might have a look at it and write to us and let us know if you think there was anything there that is remotely straying into that territory.

Robert Hannigan: It is kind of you to ask, but it would not be possible, for the simple reason that since I left last April there may be classified information that is somehow behind it. It seems unlikely to me. I could only give you an answer that was out of date. That is a question that ought to go to the ISC. As John says, the easiest thing is to ask the ISC to ask this question.

Dr Lewis: I am sure we could, but they might not be willing to reveal the results. Surely, if there was any question of this, one would be able to look at the article and say, “I see a point here which I have never seen in open discussion before”, and I cannot see any point there that I have never seen in open discussion before and I wondered if any of you had.

Sir John Sawers: You examine the details of the Daily Telegraph more closely than I do.

Dr Lewis: It is up there on the internet and you know how to use it.

[ … ]