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Jim Murphy MP, Labour's Shadow Defence Secretary, speaking at the Dahrendorf Symposium today, said:

We are living through an important moment for defence policy.

As the conflict in Libya ends that nation’s stability must be realised. As our Forces return home, the Arab awakening which led to the Libyan revolt remains untamed in other parts of the region. Meanwhile in Afghanistan, NATO forces are trying to find the correct balance between enforcement and transition. We have a timetable, but not yet the certainty to say progress is irreversible.

Closer to home, across Europe the major new threats we face, from terrorism to climate change, nuclear proliferation to cyber attack, will require new answers. New technologies, greater co-operation, bolder preventative action: our arsenal needs to be modernised. Defence is becoming more expensive, more intricate and more unpredictable. But we live in a global era, and there is no opt-out. The problems we face are shared and many of the solutions need therefore to be collective.

The events we have witnessed recently in the Eurozone and EU have made us all aware of both our interdependence and the unpredictability of a world in which events in 2011 make it seemingly impossible to plan with certainty for 2012.

In amidst this transformative security landscape there are two new issues facing Europe which will shape defence profoundly. One is political will, the other economic reality. Europe’s ability to protect individual nations’ sovereignty and our collective security, as well as promote and protect the values and interests we hold dear, depends on both the commitment and ability to act. The dual challenges of falling political will and challenging economic reality are threats to both that necessary commi tment and ability.

Today I want to argue that greater co-operation between European nations on defence can help overcome these challenges, providing the collective might that can spur shared resolve.

Common threats require common action and shared operations are increasingly commonplace. European nations worked together in the Balkans, Chad and Afghanistan and around the world in EU, UN and NATO missions. We have joint objectives and standards, priorities and interests. But there are three key political challenges which could undermine our ability to continue and to maximise this approach.

First is that the current political and economic turmoil in Europe undermines calls for greater multilateralism. We have all been rapt by recent events, knowing that the shape of the EU will never be the same again after recent historic events. To argue for greater co-operation on defence at the very moment economic union has put livelihoods at risk will be difficult to say the least. The financial crisis has ushered in protectionist sentiment which will shape national identities, not just economic policy, at arguably the time when nations are more reliant than ever before on each other for national security.

Second, our publics are wary and weary. There is a widespread public reticence towards international, expeditionary action. Mixed and impatient European public opinion towards Libya demonstrated this. No allied combat casualties and a lack of collateral damage from what has been termed a ‘new model’ of intervention may help persuade publics of our ability to act and the value of doing so, but multilateralist, proactive action will be hampered by public scepticism and reserve arising from the recent experiences of overseas conflicts.

I worry that a consequence of the conflict in Afghanistan combined with the legacy of Iraq will be to make a concept permanently unpopular, with nations becoming ambivalent about acting on their responsibilities beyond their borders. In such a state we would still believe in the same values, we just may not so readily stand up for them. The principal danger would be that the drivers of potential conflict would proceed unabated. We must make the case, therefore, for the duty to act and to influence events overseas.

In making that case we must beware of false distinctions. The current divide in the debate on defence that distinguishes between pro-Europeanism and Atlanticism is unsustainable and unsuited to modern times. For many on the right in the UK, Atlanticism has become synonymous with a self-defeating, virulent Euroscepticism that is bad for Britain. It is intellectually lazy to force our country into a binary choice of Europe or America. In truth, the UK will need both if it is to be the nation it seeks to be and Europe can be stronger through stronger ties with the US.

The third challenge is the recognition that NATO, not the European Union, will be the forum through which action is agreed and taken but for that to be successful a greater contribution is needed from European nations. NATO is more reflective of the breadth required of coalitions which will have the might and influence to help support indigenous populations and facilitate regional solutions. NATO is key also to the continued support and engagement of the United States. But this depends on NATO becoming more capable, deployable and balanced.

At once, the Libya campaign demonstrated each of these factors. Despite the difficulties Libya is testament to Nato’s enduring relevance: the mission was swift and successful. The engagement of both the UN and NATO meant the Arab League and in particular nations such as Qatar were fully engaged. But it also demonstrated something else about NATO. That just eight of 28 members contributed is not enough. This was not a cross-Alliance effort. French Foreign Minister Alain Juppé said of the differences between France and Germany, "The common security and defence policy of Europe? It is dead."

European governments have to be more honest with each other and about their capacity within NATO. There are too many never-to-be-used battle tanks, unusable fast jets and undeployable army conscripts. The 27 EU member states have half a million more men and women in uniform than the Americans but can deploy a fraction of the capabilities the US can. Amongst all the talk of coalitions of the willing, the act of creating a coalition of the capable may in the future be a bigger challenge. That is not sustainable if we want to project power in a world where it is shifting to emerging nations and economies.

Many, in particular over the Atlantic, have come to the conclusion that the transatlantic alliance will only be more meaningful if it is more reciprocal.

That means greater burden sharing - France, UK and Germany represent 65% of all defence expenditure in NATO Europe and 88% of R& ;T investment. That also means greater deployability of assets - the EU spends E200bn on defence a year, more than any country except the US, and has two million European troops in uniform, but only 5% deployable at any one time. And, yes, that also means nations aiming to meet the NATO expenditure targets on defence.

It is important to note that this debate is focusing on further co-operation between European nations and not the European Union. The EU of course has an important role to play in security policy and has sent civilian crisis management operations to Chad, the Democratic Republic of Congo and Kosovo among other countries in recent years to deal with a range of crises. The EU is also involved alongside NATO and others in tackling piracy off the coast of Somalia. Yet final decisions on deployment of Forces, amongst the biggest possible decisions any government can make, lies in nation state capitals. European foreign and security policy-making will remain a sov ereign and inter-governmental exercise. And – vitally – while advocating greater European co-operation, we are clear that any arrangements must protect national operational independence and the right for countries to retain the ability to defend themselves without NATO or the EU.

I believe we can overcome much of the scepticism about wider and deeper European nation co-operation only if we confront it. If we show we have the means to respond effectively and flexibly to today’s threats at a time of austerity.

Let’s be clear, some cuts to defence budgets may impact on what can be achieved overseas.

There are degrees, and I have argued at home in the UK that we believe the scale and pace of the cuts represents strategic shrinkage by stealth.

And this is in the context of austerity across Europe. Spain has cut spending on defence materiel by more than 50% since 2008. Bulgarian armed forces will shrink by more than 20% by 2015. The Slovenian governmen t has proposed a further 7% cut to the national defence budget. French efforts to ring-fence military funding are positive but the mid-term review may lead to reductions. German defence spending is on course to decline by 10% between 2008 and 2015.

European military research expenditure is on course to decrease, contrasting sharply with investment by Brazil, Russia, India and China.

In this context of falling investment the notion that NATO European nations consistently fight alongside one another but build their Armed Forces in separation needs to be reconsidered.

In structuring our Forces or dismantling capability greater European co-operation within NATO is essential. Co-operation on defence procurement is critical, enabling us to maximise our ability to project force and do so cost-effectively, supporting both the frontline and the bottom line.

It is vital that we promote more efficient industry and better value defence products, regulate out distor tions in the market and support defence companies and their supply chain. That means limiting the fragmentation which arises from differing national procurement regulations, reducing the number of national equipment programmes and ironing out the delays which arise from individual export authorisations.

There has been progress on this in recent years. The European Defence Agency voluntary code of conduct on procurement competition, the Directive on defence procurement limiting individual export licenses, and the EDA’s limits placed on offsets all work in favour of a strong European industrial base. The key thing now is that implementation of these changes is based on mutual trust and sharing of best practice to ensure the benefits are reaped by all.

Co-operation over procurement in an open market is the way Europe can compete in a very expensive and technologically-driven activity. Strong national export markets will be bolstered, not limited, by European co-operati on, and that is our shared challenge. Europe must learn to act better together or have no other option than continually buying from the US.

The Opposition in the UK will urge the Government to look at where we can co-operate further with those with whom we have existing successful partnerships, namely France, Germany and Italy.

As well as co-operation on procurement we can go further to better co-ordinate force structures. This does take place, but not nearly to the extent which means that we maximise the real potential for frontline benefits.

We should explore where there can be arrangements to pool maintenance, training, education infrastructure and skills on a bilateral or multilateral basis. We should pool R&D facilities and work-streams to develop specialisations together. The resultant economies of scale could be used to directly fund training and equipment programmes and to contribute to balancing domestic defence budgets.

An excellent example o f collaboration is now the Anglo-French accord of 2010. Among the principles agreed in this so-called "entente frugale" is the commitment to limited interoperability, joint purchasing and sharing of expertise and facilities. Both countries are to ensure, for example, that aircraft can operate off each other's carriers and are looking to pool spare parts and servicing resources. It lays the basis for further collaboration between two countries in the future.

But this should not be an isolated achievement. We hope that the Northern Group sees similar agreements emerge, and that other similar groupings can be assembled to discuss this agenda. Procurement, Research and Technology spend, maritime surveillance, energy security, cyber and combating piracy are all areas in which we should seek to work together. We welcome the SDSR citing the possibility of closer co-operation with Germany, Italy, the Netherlands and Spain.

The UK-France Treaty is a model which I believe can lay the foundations for a landscape of European NATO co-operation based on distinct, sometimes regional co-operations.

Where countries can and where it is in their mutual interests, they should work together. This is not about creating the basis for what some Eurosceptics call the “Euro army”, but pursuing gains where they can be found on a case by case basis, and making the pursuit of those gains the rule rather than the exception. The steps taken by Nordic countries and the Czech Republic and Slovakia in this direction, for example, are to be encouraged.

Another vital area is, I believe, exploring how reductions in defence spend and resultant changes to force and equipment structures in European NATO Alliance nations can be better co-ordinated. Our interdependence should shape not just the nature of operations but also how we prepare for operations. Procurement is difficult to get right, this is something we cannot afford to get wrong. Co-operation over h ow we both build and configure our Forces should help form a strong European pillar within NATO, based on shared risk as well as strategic need.

European NATO countries not only have to work together to build coalitions, as in Libya, but must also co-ordinate much more effectively on defence cuts in order to prevent serious gaps in military capabilities.

Holland has withdrawn its main battle tank fleet in its entirety. Spain is cutting R&D spend by 65%. In Austria, 1,000 weapon systems are to be phased out. Denmark is cutting its Navy and ground-based air defences. Germany is reducing its requirement for attack helicopters and airlifters and phasing out several maritime capabilities. Some nations are no longer committed to having tanks to deploy or submarines at sea. In the UK we have a carrier strike capability gap for approximately a decade and long term sovereign production of fast jet capability is uncertain.

In light of the scale of this change takin g place it is important we make efforts to avoid duplication as well as minimise the depth of capability shortfalls.

If we accept that we will be operating in partnership more regularly, capability reduction should be co-ordinated with a view to having a balanced, cross-Alliance equipment programme. Pooling and joint purchasing do already take place, but NATO could act as the forum through which there is greater co-ordination of decision-making and better communication between nations to ensure force structures are as complementary as possible and co-operation is advanced where mutually beneficial.

In the Strategic Concept we have shared tasks, principles and objectives and yet there is little talk of how they are to be met efficiently and effectively in practice. Realising the vision of the Concept should be our mission, and that relies on our taking more collective action in our planning and better aligning national prerogatives.

To advance the argument over how best to deploy and project force I believe it needs to be coupled with another essential argument over how the goals of defence policy can best be realised. Defence, ultimately, is about guaranteeing security and liberty. Not just for ourselves, but those around the world.

It is an important lesson that the most effective defence policy is not always about military hardware, the configuration of a nation’s Forces or the military strategy. It can also be a world-class international development policy of the type the EU has done so much on. Investment in education, democratic reform and viable economies can hinder the spread of conflict. And the careful prevention of development policy can be so much better than the painful cure of military action.

Internal oppression has been revealed to be one of the biggest security threats we face. Autocratic control has proved unsustainable up against those denied natural freedoms. Power without legitimate authority means that authoritarian governments act in ways that may necessitate an international response.

For those countries with whom we have a working relationship, or whose failure threatens international security, we must be in the business of working in partnership to build capacity in a way that does not leave Western-created administrations dependent on overseas aid. Rather we must seek to enable effective national and local governance, frameworks for civil justice, the functioning rule of law and a legitimate civil police. Interventionist action is increasingly important, but this means recasting our notion of intervention so that it is more than reactive military action but rather more often proactive developmental action.

This is an area where the EU can and does make a real difference. The EU is the world’s largest donor of official development assistance, funding vital projects to fight poverty, build governance and spread health and education. The European Instrume nt for Democracy and Human Rights is committing over 1 billion Euros to human rights worldwide. The European Union offered an important response to the Arab Spring, promoting sustainable democracy and economic recovery.

Where the freedom to create societies, economies and administrations does not exist due to the suppression of legitimate calls for change, we should all aim to be part of the peaceful process by which those calls are answered.

To achieve such strong developmental and defence policies we need to take our populations with us and overcome their reticence and their real and understandable concerns over domestic priorities. We need to win the argument, therefore, that the barriers between the security overseas and at home often no longer exist.

Realisation of democratic ideals overseas supports security within our own shores. In today’s world the prosperity, security, liberty and civil liberties of those at home cannot be separated from events beyo nd our borders. The era of a global recession and the global threat of terrorism prove that to any residual doubters. Threats are transnational. A belief that you have responsibility beyond your borders is not, as some would have it, ideological, but, a necessary response to the world in which we live. That essential internationalism demands of us a new integrated and internationalist defence posture.

In Europe, we need to integrate with all our partners, and if we do not want the title ‘The Pacific President’ to stick to President Obama then the onus is on Europe to act.

As importantly, we must recast some of the orthodoxies of international relations. For many years we will all be renegotiating our world order through the consequences of the Arab spring. We have all seen people across the Middle East and North Africa lose their fear for the sake of their right to have their voice heard and have some fundamental democratic rights. Realisation of democratic ideals overseas supports security within our own shores, and so empowerment of the will of people must, I believe, become a focus for integrated defence strategies. That means diplomatic leadership and developmental intervention, with a focus on governance and political processes, becoming as important to our defence policy as our ability to intervene militarily.

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