The Report
of the Iraq Inquiry
388.
Speaking
to The
Independent on Sunday in 2007,
Lord Guthrie, Chief of the
Defence
Staff from 1997 to 2001, said that he came close to resigning
during the
negotiations
over the 1998 SDR:
“We had
taken the Treasury by the hand through it all and thought we were
home
and dry …
Then at the last moment [Mr] Brown tried to take a lot more money
out
of it.
If he had, the whole thing would have unravelled.”225
389.
Mr Hoon
told the Inquiry that when he arrived at the MOD, in October 1999,
there
was “quite
a strong feeling that it [the MOD programme implementing the 1998
SDR]
was not
fully funded”.226
390.
Sir Kevin
Tebbit, MOD Permanent Under Secretary from July 1998 to
November
2005, told
the Inquiry that when he arrived at the MOD he estimated that the
department
was “about
half a billion short” of being able to implement the SDR, although
his
colleagues
did not agree the shortfall was that large.227
The MOD had
tried but failed to
“recover
the position” in the 2000 Spending Review.
391.
Sir Kevin
told the Inquiry that the MOD’s resource position in 2002 had not
affected
the
decision to mount a large‑scale operation in Iraq:
“While
I think the core budget was insufficiently funded to deliver
the SDR force
structure,
that doesn’t mean to say that I felt that the funding wasn’t
there to conduct
the [Iraq]
operation, or indeed to sustain our objectives in Iraq, on the
basis that
we were
planning to hand over, on the basis that we were not intending to
stay …
beyond
a certain period …”228
392.
Mr Woolley
told the Inquiry that the SDR set out a high‑level strategy, and it
was
a question
of judgement whether a particular level of funding was sufficient
to deliver
393.
Mr Woolley
identified three factors which, in his view, caused the
“budgetary
pressure”
that the MOD faced in 2002:
•
the
year‑on‑year efficiency savings that the 2000 Spending Review
had
required;
•
the cost of
salaries, fuel and equipment rising faster than inflation;
and
•
exchange
rate fluctuations.
394.
The SDR New
Chapter, published in July 2002, continued the shift
towards
expeditionary
capability.230
225
Independent
on Sunday, 11
November 2007, Tony’s
General turns defence into an attack.
226
Public
hearing, 19 January 2010, page 127.
227
Public
hearing, 3 February 2010, page 3.
228
Private
hearing, 5 May 2010, page 38.
229
Public
hearing, 2 July 2010, pages 10-12.
230
Ministry of
Defence, The
Strategic Defence Review: A New Chapter, July
2002.
506