Defence Policy
Objective:
	To formulate and implement Defence policy.
Performance Measures:
	Progress towards implementing the decisions of the NATO Washington Summit, including the Strategic Concept and Defence Capabilities Initiative. NATO enlargement in line with UK interests.
	Progress towards an EU that can, by 2003, rapidly deploy forces capable of undertaking the full range of peace support operations. Effective EU decision-making bodies and relations with NATO.
	Improved effectiveness of the UK contribution to conflict prevention and management.
	Formulation of an effective Defence policy to ensure that the MOD has the right concepts and plans to counter international terrorism.
Performance Assessment:
	Good progress was made on preparations for this November's NATO Summit in Prague, and the findings of the NATO Force Structure Review were in line with UK policy. Headquarters Allied Command Europe Rapid Reaction Force achieved full operating capability.
	The EU's political and military decision making structures became fully operational, although EU-NATO arrangements were not formally agreed. Whilst 104 of the 144 Headline Goal capability targets were met, all of the remaining shortfalls are unlikely to be resolved by 2003.
	The MOD undertook conflict prevention activities in support of priorities jointly agreed with the Foreign and Commonwealth Office and Department for International Development.
	A New Chapter to the Strategic Defence Review was successfully developed to a very demanding timetable, aimed at ensuring that the Armed Forces have the right concepts and capabilities to meet the challenges of the changing security context.
Performance under this Objective contributes to progress against PSA Targets 4, 5 and 6 (see Annex B)

  Strategic Defence Review New Chapter

52. In the wake of the shocking events of 11 September 2001, the Secretary of State for Defence announced that work would be undertaken on a New Chapter to the Strategic Defence Review published in 1998. This looked again at the UK's defence posture and plans to ensure that the MOD has the right concepts, the right capabilities and the right forces to meet the additional challenges that the UK now faces. 

53. It was clear from the outset that the Strategic Defence Review provided a firm foundation on which to build. The direction that it set, together with lessons learnt subsequently from, for example, the Kosovo campaign in 1999, continued to be broadly right. Hence a New Chapter rather than a new Review.

54. The work was split into two distinct phases with a very demanding timetable. The first phase, from October 2001 to January 2002, set the scope of the work and identified the key issues and questions to be tackled. The outcome of this work was reflected in the discussion paper published on 14 February. The second phase that followed, more heavily focused on the potential capability and resource implications, considered a range of possible options for giving practical substance to the overall policy. 

55. Work in each of the phases was undertaken by working groups led by a senior official or military officer. These groups comprised key stakeholders and individuals able to bring fresh perspectives to bear. The broad subject areas considered were strategic issues, overseas relations, deterrence, home defence and security (including the role of reservists, which is covered in paragraphs 90-92), and overseas operations. 

56. A White Paper was published on 18 July 2002, setting out some conclusions and the implications for Defence plans of asymmetric threats of the kind seen on 11 September. 

NATO

57. The MOD, working closely with the Foreign and Commonwealth Office, made a significant contribution to the ongoing development of NATO. Good progress was made on preparations for this November's NATO Summit in Prague, with consensus emerging among Allies on the key issues of capabilities, enlargement and adaptation. Efforts during 2001/02 led to the new NATO-Russia Council being established at the Rome Summit on 28 May. This has made a sound start, and MOD staffs are now working closely with NATO and Russian colleagues to ensure that the agreed programme is successful. 

58. The NATO Force Structure Review was approved on 1 July 2002; its findings were in line with UK policy on encouraging NATO nations to develop their deployable capability. The new force structure is now being implemented, and Headquarters Allied Command Europe Rapid Reaction Force – for which UK is the Framework Nation – was the first to be endorsed as a NATO High Readiness Force (Land) Headquarters. The spring meeting of NATO Defence Ministers initiated a review of the NATO command structure. Progress is due to be reported at the Prague Summit, with implementation commencing in 2003. 

European Security and Defence

59. The EU's political and military decision making structures – Political and Security Committee, EU Military Committee, and EU Military Staffs – became fully operational in 2001/02. Although overall EU-NATO relations continued to develop, the so-called Berlin Plus arrangements – through which the EU will have assured access to NATO's planning resources and other key assets – were not formally agreed. 

60. The UK continued to take a leading role in efforts to improve European military capabilities, and made a substantial offer of forces towards the Headline Goal. At a conference in November 2001, the Headline Goal target was broken down into 144 capability targets, of which 104 had been met by the end of 2001/02. A European Capabilities Action Plan was also put in place to remedy the remaining shortfalls, and the UK is involved in 17 of the 18 panels set up to address these. Some of the capability gaps will be addressed in the longer term through planned procurement programmes, so efforts are also focusing on finding interim solutions to meet the target date of 2003. The EU will be in a position to take on progressively more demanding operations as the assets and capabilities at its disposal continue to develop.

Missile Defence

61. In 2001/02, the US announced its intention to withdraw from the Anti-Ballistic Missile Treaty with effect from 13 June 2002. This allowed the US to intensify missile defence testing and led to increased consultation with allies. The UK continued its dialogue with the US and others on future US missile defence plans. On theatre missile defence, the 3-year UK programme to monitor developments in the risks posed by ballistic missiles, and the technologies available to counter them, concluded in July 2001. A summary of the final report was placed in the public domain in February 2002. There remains a need to evaluate further the potential role of missile defences as one element of a broad-ranging response to missile proliferation. Two further programmes of work are now underway. 

Defence Diplomacy

62. Defence Diplomacy is one of the MOD's core missions and makes a significant contribution to preventing and resolving conflict around the world. During 2002, approximately 75 students from 40 countries will complete a seven-week "Managing Defence in a Democracy" post-graduate diploma course in the UK. Four 'export' versions of this course were held in 2001/02, in Sierra Leone (twice), Romania, and Uganda. The latter helped Uganda to prepare for a review of its defence policy and structures, which is being conducted with the assistance of our specialist Defence Advisory Team. The Defence Co-operation Forum with Pakistan met in London in February 2002, for the first time since it was suspended in 1999. 

63. The Outreach programme continued to provide effective support to the defence reform process in Central and Eastern Europe, the Caucasus and Central Asia. This included the provision of UK military and civilian personnel to advise NATO aspirant countries on the reforms necessary to prepare for membership of the Alliance. Since 11 September, programmes in support of Georgia and the Central Asian republics gained significance. In particular, UK links with Uzbekistan enabled the MOD to negotiate and secure access to facilities for personnel engaged in operations in nearby Afghanistan. By the end of 2001/02, the Russian Resettlement Project had retrained over 15,000 retired and redundant military officers, over 70% of whom had found civilian employment. 

64. The MOD programme to help Russia destroy its chemical weapon stockpile achieved a key milestone with the signature of a bilateral treaty in December 2001. The subsequent signature of the Implementation Arrangement in March 2002 will allow the contract to be placed for the first project. Arms control was enhanced in January 2002 with the entry into force of the Open Skies Treaty. This allows aerial observation flights over the territory of signatory states, and is therefore a valuable confidence and security building measure. 

Conflict Prevention

65. 2001/02 was the first year of the cross-Whitehall initiative for conflict prevention. This is divided between peace support operations and assistance programmes, which are themselves sub-divided into regional and functional categories. Under this initiative the MOD, Foreign and Commonwealth Office, and Department for International Development planned and undertook activities jointly, in support of agreed priorities and strategies. The MOD participated directly in regional conflict prevention initiatives in Africa, the Balkans, Central and Eastern Europe, Russia and the former-Soviet Union, and the Middle and Near East. 

66. The MOD also contributed to the functional initiatives aimed at reducing small arms proliferation. The small arms global pool amounts to some £19.5M over 3 years, and covers: weapons collection, management and destruction programmes; assistance to states in implementing regional small arms programmes; and support for civil society and policy-oriented research. Other functional programmes include enhancing the capacity of African nations to participate in peace support operations. The UK Peace Support Team (East Africa) played a key role in this by providing advice on the training needs of east African armed forces, and by supporting the Kenyan Army Peace Support Training Centre. This centre of excellence specialises in the pre-deployment training of troops about to embark on UN peace support operations. Kenyan Army combat engineers were trained at the Centre in March 2002, before deploying on UN de-mining duties.

Other Outputs

Support to British Defence Exports

67. In 2001 the UK won defence orders worth £4.2 billion. These included the sale of EH 101 helicopters to Denmark, Super Lynx helicopters to Thailand, Rapier II missiles to Switzerland, Rolls-Royce engines to a number of countries, and a wide range of equipment to the United States. Halmatic – part of the Vosper Thornycroft group – was selected to partner Abu Dhabi Shipbuilders in the construction of Fast Patrol Boats for Abu Dhabi. Following a drop in the UK's market share to 13% in 2000, this represented a significant increase to 19% in 2001, in a smaller global export market.