The Report
of the Iraq Inquiry
119.
On 31 October,
Mr Blair, Mr Straw, Mr Hoon and Adm Boyce discussed
the MOD’s
wish to
offer Package 3 to the US for planning purposes.85
Mr Blair
asked about the
additional
costs associated with Package 3 and whether they had been discussed
with
the
Treasury. Adm Boyce said that he believed that:
“… if we
[the UK] made a major financial contribution to the campaign
through
Package 3,
we would be under less pressure to finance a big share of
the
post‑conflict
reconstruction effort.”
120.
The record of
the meeting does not indicate whether Mr Blair’s question
about
the costs
of Package 3, and whether they had been discussed with the
Treasury,
was answered.
121.
Mr Blair
concluded that the MOD should tell the US that the UK was prepared
to
“put
Package 3 on the same basis as Package 2 for planning
purposes”.
122.
A copy of the
record of the meeting was sent to Mr Bowman.
123.
Mr John
Dodds, who had replaced Mr Nye as Head of the Treasury
Defence,
Diplomacy
and Intelligence Team, advised Mr Brown on 8 November 2002
that the
Treasury’s
“instinct” was that Package 3 would cost £2.5bn, rather than the
£1.5bn
to £2bn
estimated by the MOD.86
That did
not include any “follow‑on” cost, such as
peacekeeping
or reconstruction.
124.
Mr Brown
received advice from a Treasury official on 17 November on whether
to
create an
allocation in the Pre‑Budget Report (PBR) to cover the cost of
military action in
Iraq.87
The main
advantage would be to enable the Treasury to set out, in a
transparent
way, the
exceptional additional costs of military action, above the
underlying state of
public
finances.
125.
The allocation
would cover the cost of military action in Iraq and the further
costs of
military
occupation and/or a contribution to a stabilisation force. The
official added that if
Mr Brown
was attracted to the idea of making such an allocation, it might be
expanded
to cover
some of the existing costs relating to the war against
terror.
126.
The official
also advised that, based on informal discussions with MOD
officials, the
military
costs relating to “occupation and/or a stabilisation force” could
be up to £1bn in
the first
year and up to £500m a year thereafter. The official
commented:
“From this
it’s clear that any future decision on a UK role in post-conflict
Iraq should
properly
factor in the potential costs.”
85
Letter
Wechsberg to Watkins, 31 October 2002, ‘Iraq: Military
Options’.
86
Minute
Dodds to Brown, 8 November 2002, ‘Iraq: Diplomatic and Military
Update’.
87
Minute
Treasury [junior official] to Chancellor, 17 November 2002, ‘A PBR
Allocation for Iraq?’
464