 Good morning everybody. Welcome. We're delighted to have you here on a rainy, at least it's not snow. Such a yo-yo winter. Every other week it seems we get a snow storm. I think it's over now and we're delighted. But we do mimic London weather today and we thought we'd make our guests feel comfortable here where it's a little gray and overcast and moss grows on the side of almost everything. Welcome. We're delighted to have you here. I especially want to say thank you to Secretary of State Fallon for putting us on his agenda. It's a very busy day that he has here today. He's going to spend a fair amount of time in conversations with Secretary Carter because there are a lot of issues that we're wrestling with. We, the United States, thankfully we're wrestling with them. We're wrestling them with an indispensable ally. I think that one of the things I was talking with Secretary of State before and saying, you know, is there a message he's bringing? He says, yeah, we're still here. We're still the strongest ally you have and we're still building the strongest program possible and don't worry about us. And I think it's that kind of courage and conviction that we have counted on for at least 70 years where we've frequently argued with each other because we're close friends and that's what friends do but we're so united to find solutions together. That's what we're going to hear today, I think, from Secretary of State. I think he is a leader that we all need, we in Washington need at this time because we are facing some astounding challenges as allies and as a country. We have a very new, complex challenge with Russia. I think the Secretary of State is going to talk about that a bit and I hope that you will ask him questions about that because it's an important part of the dialogue we need to be hearing here. We're not having enough of a national debate about this in Washington and of course we know the challenges we have in the Middle East and we're together on this. So it's a rich opportunity for us. I want to thank all of you for coming and would you please, with your applause, welcome the Secretary of State for Defense, Sir Michael. Well, thank you. Well, good morning and I'd like to thank CSIS for hosting this event and thank you, John, for that very kind introduction. It's a real pleasure to be back in the United States, a country with which we have so much in common. History, culture, language, most of the time. But also those fundamental values of justice, of freedom, of the right to choose our governments and above all of the rule of law. In a year of poignant anniversaries it's worth recalling that these were the values that were fought for at great cost 150 years ago under the leadership of that great defender of liberty, your 16th President, tragically assassinated just a mile or so away from where we meet this morning. Abraham Lincoln, whose memory is rightly honoured in London with a statue facing our Parliament, knew that for our values to flourish they must rely on the rule of law. And in modern times we defend that rule of law internationally, as well as at home. Our Presidents and Prime Ministers from Roosevelt and Churchill, Reagan and Thatcher, to President Obama and David Cameron have been unequivocal in saying that where those values are threatened we must act. As a young Member of Parliament back in 1984, I had the enormous privilege of meeting Ronald Reagan on his way to the 40th Commemoration of the Normandy landings. He spoke the following day at Omaha of Allied Forces coming and I quote, not to take but to return what had been wrongly seized, not to pray on a brave and defeated people but to nurture the seeds of democracy amongst those who yearn to be free again. Just as together we broke the bonds of totalitarian tyranny in the Second World War so we faced down the threat of communism and the Cold War to win freedom for the peoples of Eastern Europe. More recently we fought side by side in Afghanistan against al-Qaeda and the Taliban who nurtured them. We helped ensure that nearly 7 million Afghan children now go to school, that 8 million Afghans were able last year to vote for a new President and crucially we prevented al-Qaeda from repeating their attacks on our streets and cities. And when I recall the sacrifice and bravery of our troops, 453 British lives, 2356 American lives, I think of Lance Corporal Josh Leakey. Last month the war did our very highest honor, the Victoria Cross. In an operation against the Taliban he sprinted not once but three times under heavy machine gun fire to evacuate casualties, to recite guns, to return fire and turn the tide of the battle. That was a remarkable act of bravery. But one thing about it wasn't so remarkable but typical. This was a combined UK-U.S. Marine Corps assault. And one of the lives he saved was that of an American, U.S. Marine Corps Captain Botion, an example of how our two militaries worked together. On Friday our Queen and Country will remember not just his bravery but the sacrifice and service of all our personnel in that conflict and a special service of commemoration at St Paul's Cathedral in London. Now of course our role in Afghanistan is not over. We have some 500 troops in that country alongside U.S. troops supporting the Afghans to take full advantage of the opportunity that those sacrifices have given them. We are committed to seeing that mission through. More broadly it is perhaps easy to forget that the last quarter of a century although punctuated by periodic crises has been one of relative peace. Political scientists tell us the proportion of people killed in violent conflict fell to its lowest recorded point and economies grew raising millions out of poverty. That success since the end of the Cold War was built upon the consolidation of an international rules-based order that codified the rights and obligations of states and peoples. And that order did not come about by accident. It was underpinned by states working together not least under the leadership of the United States for their collective defence and to deter those tempted to misbehave. Of course there were challenges. There always are but broadly that system has held. Now we cannot, we must not take the international rules-based order for granted. And today we are seeing a new set of multiple concurrent challenges to that order that many seasoned practitioners and thinkers believe is unprecedented. A point that Senator McCain made so cogently in his speech at the Munich conference last month. In Europe we have seen Russia seek to change an international border by force and destabilise a neighbouring sovereign state something we thought we had consigned to history. In the Middle East we see the Daesh trying to establish a caliphate the size of the United Kingdom spanning the borders of Syria and Iraq. And in Africa we see Boko Haram causing mayhem in northern Nigeria and along its borders with Cameroon, Niger and Chad. These are new forms of fascism for our times. A perversion of Islam in the Middle East and North Africa and a subversion of democracy in Eastern Europe. So what is to be done about it? First we must properly understand the nature of the threats we face whether hybrid warfare in Eastern Europe or the Daesh is twisting of Islam. Second we should deal appropriately but resolutely together with our international partners with the challenges we face. And thirdly we have to ensure that we have the continuing credibility and capability to deter anyone else tempted to do us harm or further challenge the international rules based order on which our security and prosperity depends. So let me assure you that the United Kingdom like the United States has no intention of luring its guard. We should play now to our strengths those values we share that have stood the test of time our partnership with long standing allies and friends and our capacity for innovation and the development of new technologies. So let me say just a word or two on each. On capability, on partnerships and on innovation. First on capability we have to be credible as well as capable and we have to be readyer than ever to respond to multiple crises simultaneously. Our strategic defence and security review recognised this back in 2010. As a consequence our armed forces have been reformed to provide the agility and deployability at scale that we need to deter and if necessary to engage. We have that capability now and we are investing in the future. We have committed not to reduce our army any further and we are adding reserves. We have committed to an equipment plan of $163 billion, $250 billion over the next 10 years and we have committed to maintaining our continuous at sea nuclear deterrent for which we secured a rezoning 329 vote majority in Parliament earlier this year. Today I'm announcing a £285 million investment in further design work for the next generation of our nuclear deterrent submarines replacing the Vanguard class over the next decade. We have today almost 200,000 people in uniform and we use them. Last year our army deployed on over 300 missions in over 50 countries of the world. We can deploy a division in the field with sufficient notice and very few countries can still say that today. We're building seven new hunter killer submarines. The first of our two new aircraft carriers, the biggest ships the Royal Navy has ever had, was launched last year and just last month we made an almost £1 billion commitment to our future frigate programme. We're investing heavily in developing our cyber capability. We've expanded and modernised our air transport, our air-to-air refuelling and our helicopter fleets. We're the only other country apart from the United States operating the Rivet Joint Electronic Surveillance aircraft and we've contributed it, AWACS aircraft and Sentinel to bolster the I-STAR picture against I-STAR. We have Tornado and the hugely impressive Typhoon Fast Jets in service. We're tier one partners in the Joint Strike Fighter programme with British pilots and British planes already flying. This is a set of capabilities that few countries outside the United States can match. And we've been setting them to work. In Iraq our Royal Air Force has struck some 176 targets and support of ground forces degrading the Daesh and gathering vital intelligence. Our troops have trained over a thousand Peshmerga and will be stepping up support in counter-IED this month. We stand ready too to contribute to the training of the Syrian moderate opposition. Meeting me in Q8 last week, General Terry recognised our role as second only to yours, the indispensable partner to use the President's words, not mine. So that brings me to the second pillar on which our future defence must rest and that's partnerships. Complex global problems require global solutions. They can't depend on the United States alone or even on just the United States and the United Kingdom. Together we've helped form an international coalition of some 60 nations against the Daesh to cut their funding streams, to stop extremist crossing borders, to degrade their capability, to start to discredit their poisonous ideology. And we're working with you to reform NATO, the bedrock of our defence in Europe. Make no mistake here, we're after the same thing together. You want Europe to do more to pay its way in defence, so do we. You want to see an end to the decline in Europe's defence spending that has a quarter of the alliance spending less than 1% of GDP on defence and 20 of the 28 members spending less than 1.5%. So do we. It was our Prime Minister standing shoulder to shoulder with your President in Wales that called on NATO nations to step up their commitment and that helped to quicker the pace of change. Getting all NATO nations to agree to reverse the decline in their spending to invest 20% of their defence budgets in equipment capabilities including emerging areas such as cyber and to set up a very high-readiness joint-house force that can respond in days, not weeks, to a breaking crisis. Once more in the UK, we are leading by example. We are one of only four countries already meeting the 2% target. We exceed comfortably the requirement to spend 20% on new equipment and we will be among the first framework nations to lead that very high-readiness joint-house force. We have led the way in the European Union on imposing tough sanctions on Russia. We have contributed typhoon fast jets to the Baltic Air Policing Mission and we will do so again this year. We have significantly increased our exercise program in Eastern Europe both to reassure our allies and to remind President Putin of our commitment to Article 5. I announced last week further support for the Ukrainian Armed Forces including infantry training and non-lethal equipment. We are considering further requests for help. While NATO is at the heart of our defence, bilateral relationships are also important. They often allow us to get the job done more quickly and more effectively. We are working with France on our future missile requirements on unmanned combat air systems. This year we will test the UK-France Combined Joint Expeditionary Force and having patented the concept, we are now developing a new joint expeditionary force with the UK leading six like-minded nations from Northern Europe to deliver a new highly flexible force able to respond to NATO and other contingencies. Of course British influence extends far beyond Europe. In the Gulf where I was last week we now consider the British defence presence in Bahrain, Qatar, the UAE, Oman, Saudi Arabia and Kuwait as a strategic hull having recently signed an agreement for a new naval base in Bahrain giving us for the first time a permanent presence east of Suez since 1971. These partnerships are inherent in the international rules-based system and they are of course crucial to defending it. Finally let me say a few words about innovation. Reading the other day Lincoln's second annual message to Congress. I noted he said the dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty and we must rise with the occasion. As our case is new so we must think anew and act anew. We must disenthrall ourselves. That means as your defence department is doing already thinking anew about how we design and generate our forces and how we deploy them. As the defence department's innovation initiative underlines if we are to succeed in overcoming the challenges we face we need to maintain our technological edge. As emerging economies compete for fifth generation technology we have to continue to innovate. We're proud in the UK that we publish some 16% of the world's top quality research but we're keen to do more to harness the intellectual power of our academics our scientists, our engineers and the private sector. So we have protected our research and development budget. We're working with British industry to set up a new defence solution centre which will create the capability and technology to respond to future international opportunities. As your offset strategy reminds us at a time of constrained defence budgets we benefit enormously from working together. We're already collaborating with you on around 100 distinct research and development programmes and we're deepening that collaboration. The US UK science and technology communique signed last year has already spawned several new ventures. In the summer, Genesis, a new UK US early career scientist exchange programme will begin covering priority areas such as space, data analytics, operational energy, cyber and autonomy. And we're also working with a new network of quantum technology hubs being set up across the UK with experts from the United States joining forces to investigate the full potential of quantum imaging. This is the first time that the United States has engaged in such a strategic wide-ranging agreement to carry out underpinning research with another country. So let me say in conclusion as we look now towards our new defence review due to start after our election in May when the key challenges I've spoken about will be reviewed and discussed in depth we will continue to work closely with your defence department and with the US military because it is in both our interests to keep broadening and deepening our partnership. No two countries have invested more materially and intellectually in building the international rules-based system than we have. No one is better equipped to defend those values than we are. And no one, no two countries have a stronger working relationship. Our ability to operate together is unparalleled. We have an unrivaled level of understanding grounded in history, forged through operations and perfected through advanced joint exercises through training and defence education. As Abraham Lincoln again said in a letter he wrote to the people of Manchester now inscribed on a statue in that same city fittingly in Lincoln Square he said whatever misfortune may befall your country or my own the peace and friendship which now exists between the two nations will be as it shall be my desire to make them perpetual. We share Lincoln's desire that is why we will continue to stand by your side ready, willing and able to act as we have always done to safeguard the international rules-based system upon which we both depend and to defend the frontiers of freedom. Thank you. Are we going to stand up? Well good morning. Thank you Secretary Fallon. Those were fantastic rich remarks. My name is Heather Conley. I'm the senior vice president here at the Center for Europe and Eurasia and your remarks have given us a wonderful range of questions and discussions. What I thought we'd do this morning is I'll moderate a few questions here with the secretary and then open our floor to questions. I should warn you CSIS audiences are very tough. They ask very tough questions. So I'm the mere warm-up act to get you prepared for the oncoming questions. I have to say as I've been watching the news and reading the press papers, the newspapers, it's been quite extraordinary to hear so many U.S. officials coming out and expressing their public concerns about the United Kingdom's commitment to defense spending General Odinero, of course Ambassador Powers, a few days ago because your description was so robust of what you're doing. Why do you think these comments are coming forward? Are they not aware of these activities? Do they sense because of the upcoming election there's still some uncertainty about the U.S., the U.K.'s defense commitment? Well first of all let's look at some of these individual comments. Ambassador Powers actually praised our exceptional contribution. She recognized what we were doing for example in Sierra Leone and sent a ship and helicopters and some 700 men. It took us 10 days to throw them down there to tackle Ebola. She described the United Kingdom as a staunch ally. In fact she made it clear as I did that one of her missions in Brussels was to drive up the commitment of other members of NATO to increase their spending alongside our line. So I didn't see anything in her remarks that was at all critical of the United Kingdom posture. I think in answer to your question I think these are uncertain times. We face these new threats from Russian aggression and from the Daesh in the Middle East and I think it's only natural for people to seek reassurance whether we have the capability and the will to deal with them. So I've described this morning we certainly have the capability. In response to General Adyako we can, as I said, field a division. We can still do that. I'm not sure any other country outside the United States in the Alliance can do that. We can do that. And above all we have the political will. When you've seen that contribution alongside you in the Middle East you've seen it in Afghanistan as well. And just to follow on that conversation and I have to say as we get closer to May 7th and we're watching this process very closely it seems there's a very interesting dynamic among political parties about making this commitment to the 2%. Prime Minister Cameron of course made the commitment to reach the 2% of GDP at Wales. Is a political dimension that we don't understand? Have you recommended to Prime Minister Cameron that the Conservative Party just make this commitment to we will spend 2% if re-elected? Well first of all I was with your President and Prime Minister Cameron in Wales. This was a very important public commitment by nature. Something that hadn't been done in that form before to arrest the decline in spending and really to encourage those members as I say who are a long way off the level of spending that you've committed and that we commit to raising their spending and it's worked. Some members now are beginning to up their spending but they've a long way still to go. Now we have committed to the 2%, we're spending 2% this financial year, we're going to go on spending 2%, we're spending 2% in the next financial year. We have later this year as well as a strategic review, we do every five years, we have a spending review to set the spending pattern for the three consecutive years after that and we can't forecast the exact outcome of that at the moment. One last election related question and then I want to move on to Russia. So there's been some concern expressed that there's a potential that if the Labour and the Scottish National Party joined forces in a formal coalition that could perhaps jeopardize the placement of nuclear deterrent in Scotland. Again is this just part of a lot of election jostling or is there something for American audiences to be concerned? Well first of all the all successive governments have supported the independent nuclear continuous at sea deterrent and we had a debate on it in Parliament back in January and we had this massive majority committing to it from both Conservative and Labour MPs, a majority of 329, I think only 35 members out of the entire House of Commons actually voted against it. So there is that commitment, successive governments Labour and Conservative have been committed to it and you have both main parties who still remain committed to it and I think it would be wholly wrong for the future of our defence to be part of some rather squalid horse trading between the parties which in any case is presuming on the verdict of the electorate. We're not anticipating a coalition government, we're going flat out for a majority and we think that's the safest route for the British people. I promise to move away from domestic politics and go to something perhaps more tumultuous, European security in Russia. Last week Foreign Secretary Hammond noted that Russia perhaps poses the greatest threat to British security and I'm wondering, I would welcome your thoughts, you yourself a few weeks ago said that there was a real and present danger that the Baltic states may face. The UK has made a significant commitment in 2017 to lead the very high joint task force, readiness task force. What is your medium to long term assessment of the threat that Russia poses to Europe? Well certainly in the Baltic states feel this very sharply, they see what Russia has been doing in the Ukraine, they feel this level of intimidation, the incursions into European airspace and the maritime missions that Russia has been conducted, they feel very exposed at the moment and that's why we have made this commitment to a series of reassurance measures, repeating the contribution to the Baltic air policing mission, sending British troops to exercise again in the autumn on the eastern flank of NATO and stepping right up to the plate as far as the very high readiness task force is concerned, we're committing not simply to act as a framework nation in 2017 but I think we're the only country so far that is committing to provide staffing for the two new regional headquarters in Stettin and Bucharest and the six forward integration units that are being set up in the three Baltic countries and in Poland, Romania and Bulgaria as well. So we see that danger very clearly and we think what's really important is that NATO needs to make clear to President Putin that it is ready to respond, that they will react, that we will react, that we will make a reality of our commitments in NATO to defend any member of NATO that is attacked and the President should be absolutely no doubt about that. What is your sense of the current ceasefire and I put that in quotes because we still have reports of violence, Ukrainian soldiers' deaths, civilian deaths. If we see where escalation continues, additional territory is seized, would that be something that the British government would contemplate NATO's permanent presence, a much more significant permanent presence on its eastern flank in the Baltic states and Poland beyond the measures, the reassurance measures that have already been taken? Well, Ukraine, as you know, is not a member of NATO so we have to approach the Ukraine issues separately. There clearly can't be a military solution. There's a military dimension to the Ukraine crisis. We need the Minsk agreements implemented in full and we reassurance that on the Russian and separatist side that they are fully complying. We don't see any need to relax sanctions until we're absolutely confident that the Minsk agreements are being implemented. We have led the way on the imposition of sanctions and on the need to keep rolling the sanctions over until we see those agreements properly complied with. So far as bases are concerned, we think what's important is the reassurance we can offer by larger scale exercises, more continuous exercises, exercises conducted under the NATO umbrella rather than bilateral arrangements. And that's what we're committing to this year and we're urging other countries to do so too. I read a statistic. It may not be correct that since Prime Minister Cameron took office there have been Russian overflights, perhaps not the right term, but Russian aircraft requiring scrambling capabilities 43 times since Prime Minister took office. What is your interpretation of this much more active testing of air sovereignty? There's been some testing of maritime sovereignty. How do you view that? Well, we see that as Russia testing the response of NATO members and it's very important that we do respond and we put our planes up there. I think we should be careful and point out that we've not had incursions into our own domestic airspace. But equally, these flights are being flown with no response from the pilots involved. They're not filing flight pans or using transponders or even when they're up there and we have our aircraft patrolling our airspace alongside them, there is no communication that are responding to any communication. So these are flights that are unnecessary. They are provocative and frankly they're dangerous. And we need the Russians to accept that. On Monday, Senator Menendez, the ranking member of the Senate Foreign Relations Committee called for the United States to rethink its forced posture in Europe. With the crisis over Ukraine and Russia, the threat that Russia poses requires a rethink. How would you characterize sort of US security leadership in Europe? We just had some additional base reductions that have, you know, we've been removing assets from Europe. Would you concur that the United States needs to rethink its forced presence in Europe? No, I'm not here to lecture the United States on its posture. I think we've been lecturing you a little bit. Well, the United States, you know, led at the NATO summit and played a key role in driving some of the weaker brother into increasing the defense spending and signing up to that particular commitment. It's for the United States to decide where it deploys its bases. But it's also for us in Europe to do more. And one of the messages I want to get over today is that when you're calling on Europe to do more, so are we. When you have, as I say, seven of the 28 members spending less than 1% on their defense, you know, they need to do more. And we're alongside you in that particular call. So when European Commission President Jean-Claude Duker calls for a European Army, is that a call for doing more? Is that where we want to go? No, that's not where we want to go. Defense is a matter for the nation-states. It's not a matter for the European Union. We have been very careful to urge an end to any unnecessary duplication between the European Union and NATO. There are some European Union operations that have been in Bosnia in terms of peacekeeping and in policing piracy off the Horn of Africa. But it's very important we don't get that mixed up with the defense of the NATO area, because the membership of NATO obviously is different to that in the European Union. And in the end, I mean, defense is a matter for nation-states. So you've been in this position, you arrived July of last year. I have to ask one, what has been the most surprising aspect of your job as Defense Secretary? Well, it seems to have been pretty busy since July. Very busy. The evacuation in Libya, the shooting down of the airliner, the onslaught of the Daesh right up to the gates of Baghdad, the NATO preparations for the NATO summit, the tackling Ebola, and then this continuing aggression in the Ukraine. So there's been plenty to do. What I think has struck me most of all is the number of states that now look to be on the point of failure, which is something I probably should have been more aware of, but just the fragility of states faced with some form of insurgency or other that really do need propping up. I mean, instability of great swathes of West Africa or the Middle East that, in the end, can come back and threaten our security in Europe. I have to say, just on that final note, one question I was thinking of is, in 2011, as British and French colleagues were very focused on airstrikes in Libya, the U.S. was reluctant, but then engaged and then NATO operations became Operation Unified Protector. What we see today in Libya, although a successful air campaign has led to pretty tragic and dramatic consequences of a failed state that now threatens Europe's security from an immigration standpoint, from instability and insecurity there. To me that has been a transition period where there was engagement but not on the ground and now we have dire consequences from that operation. Well, you described the air campaign in Libya as successful and I don't think we should regret it. We gave Libya the chance to explore a better future without Gaddafi and that hasn't turned out as well as everybody hoped and we've got to redouble our efforts to drive some political settlement. We have the parties in Libya now meeting together for the very first time, something that we've encouraged with UN Ambassador Leon. We have Jonathan Powell working there as well. It's something we've encouraged. In the end that has to be the solution. There's forces that are prepared to reject the dash, have to work together in Libya and work towards a stable political settlement. Fantastic. All right. Well, that was your warm-up. I think you're ready for all and I see lots of hands. You're ready for your audience. Just to remind you, we'd like you to offer your name, your affiliation. We'd like to keep our questions short so that the secretary can respond to them. I think if it's all right with you, we'll take a few questions and bundle them together. Sure. I can give you a paper and pen there and then we'll take them. So I think we'll just start up front here, please. Thank you, Chloe. Thank you so much. Hi, sir. Vagamuradian from Defense News. Heather, thank you very much and thank you, sir, for your comments. There is a lot very positive about British investment in defense capability. Obviously, with the introduction of the new carriers, tremendous air capability, strike capability. But ultimately, it's a size and mass question and one of the things I think that folks here are talking about is, for example, the Royal Navy having to scrape the waterfront to get the manpower they need to be able to deploy ships at this very, very aggressive cycle. Folks from each of the services have said the challenges that they face in that. How do you alleviate that fundamental burden? I mean, I think that's one of the questions that, for example, Ray Odierno, General Odierno is talking about as well, is there's a tremendous amount of capability, but it's a very, very close-run thing each time, especially at this pace of operations that you're going on and a persistent concern that the next defense review is going to mean deeper cuts, more of a reduction in people. How do you address that fundamental people challenge that you have tremendous capability but may simply not have enough bodies to put against all of the missions that you're signing them all for? Fantastic. I think we have Sir right there. We could pass it. I should just pass it to you. We'll take two more questions. Please, Sir. Bill Sweetman of Aviation Week. On the 2% question, I'm puzzled as to why it seems to be difficult at the moment for the government to say we will commit the next spending review to sustain 2%. That does seem to be an area of concern and that does seem to be concerned that if 2% is sustained, it'll be sustained by moving things like GCHQ within the defense budget. Can you address that question and say whether there's any possibility that such a commitment will be made in advance of the election? And, Sir, if you can just pass that right behind you. Sir, thank you. And then we'll allow you to answer. Sir, please. And a little different, Kevin Winston is my name, retired Navy Captain. A lot of the King Abdullah from Jordan, General Sisi, a lot of leaders in the Middle East have had education in British military schools. With the U.S. relationship with Egypt, maybe a little bit less than it was. How is the U.K. influencing people in Egypt, other countries in the Middle East through those long-term relationships that they got from British military schools? Thank you. Thank you so much, Secretary. Okay, well, there are two or three points there. First, I hope we can't have this criticism both ways. You can't say Britain hasn't got the capability and then say to me, well, you've got the capability, but can you actually manage? I hope you recognize we are investing again. The reason we're able to invest again is because we sorted out our defense budget just as we sorted out our public finances generally. We had a defense budget that had a huge black hole, self-ordered but not properly financed, and we've sorted that out to the extent to which we are trusted by the Treasury now to develop a 10-year equipment plan, as I described, 164 billion pounds sterling spread over the 10 years, which is enabling us to build seven hunter-killer submarines, two aircraft carriers, 600 armored vehicles, invest in joint strike fighter, and the rest of it. We have the finance to construct and modernize these new platforms. So far as Manningham is concerned, we are as the economy expands, and these platforms become increasingly high-tech, if I can put it that way. We are competing with the rest of the economy for some of the same people, for engineering skills, for technical qualifications, both at rating level and at officer and graduate level. So we have to modernize our approach to employment like any other employer, and we are looking at modernizing our employment model the way we can appeal to those who might not want to join the services, as you did in the old days, for maybe 25, 30 years, but maybe only want to join for a shorter period. We have to look at these things to make sure we have a properly flexible pay structure that can recognize the realities of modern life that people may want to commit for very long periods, and we need to incentivize them appropriately, and make sure too that those with those engineering and technical skills don't feel they have to abandon that work to get promotion that they can retain. We need to be much more flexible in the commands as to the way we look at the overall structure. You did refer finally to sort of deeper cuts coming, and let me just reassure you what we said and what the Prime Minister emphasized again yesterday. We are committed to maintaining a regular army of 82,000. We are not planning future large-scale redundancies. The last of the big redundancies was announced just before I took office back in June. We're planning to keep the army at around 82,000, and what we're adding to it are reserves. We're not planning deeper cuts in the level and structure of our armed forces. The question on the 2% and the commitment, we have made commitments, as I've said, to the equipment budget, to the broad shape and size of our armed forces and to maintaining and modernizing the continuous at-sea deterrence. So those are all part of our longer-term commitment to defence expenditure. You're asking to see a formula encompassing all that. You don't have to wait for the outcome of the strategic review later this year. I hope you'll be able to see that very clearly in our manifesto commitment that we set out in advance of the election in just a few weeks' time. You also asked me about the definition of spending accounts towards the 2%. This, of course, is a NATO matter. They have their own particular classification. Of course, we look at this from time to time as the classification itself can be revised with the inclusion, for example, which we didn't used to do, but which you're supposed to do of war pensions within NATO's spend and so on. So it's something we'll obviously continue to look at. The third question was about Egypt. I think your issue was the guys there weren't at Sandhurst and suffer from that. And you're right. There's a large number of my fellow ministers or leaders in the Middle East benefited from our training. I was with the King of Jordan last week. We fondly remember his time at Sandhurst and others were at Cramwell and the other colleges and so on. But we've had a team in Egypt very recently and we are looking to see how we can develop our military cooperation with Egypt, how we can help them on counter-terrorism where they've had their own internal issues, as you know, down in Sinai, and whether we can work more closely with them with the problem we have in Libya next door. So we are not neglecting Egypt. On the contrary, we have been very recently developing our relationship with them. Before I turn to the next round of questions, just a quick clarification. Can you help me with the timeline of the SDSR? So obviously work is ongoing. The election will occur and then it will then over the summer towards the fall and then it will be produced in the fall. Is that the timeline for the release right now? Obviously lots of factories will change that. Well, not quite. It's not ongoing. The review starts after the election. We've obviously been doing some homework, some thinking, some preparation of evidence. But the review itself does not start until after the election and it does not only involve my department. It will be led by the Cabinet Office. It involves the Home Office, the equivalent of your Homeland Security Department. It involves the Foreign and Commonwealth Office as well. So it is a cross-government exercise that will begin after the election and I hope will be completed in the autumn. One thing I can say, and I hope I implied this in my remarks, is that this will be more of an international exercise than before. I'll be making this clear to Secretary Carter later today. We want to involve our key allies in this exercise more thoroughly than we've done before. Not simply on procurement and collaboration, but when it comes to the various capabilities that we need to address, it is very important that we work with the United States and indeed with France and our other key note-over. Fantastic. Lots of hands. So we'll do the two right in the aisle. Please get a microphone there. Thank you. Hello, I'm Kylie Morris, Channel 4 News's Washington Correspondents. I wanted to ask you, given the high-level American criticism of falling defence spending, how much has your visit turned into a kind of damaged control mission? And the 2%, going back to 2%, isn't it inconsistent of Britain to join the Americans in cheering other European countries to meet its 2% commitments when Britain itself is not prepared to make that long-term commitment at this stage? And finally, if I may, on the Islamic State Group, there's been a video released today of a young boy, apparently executing a captive who is allegedly an Israeli spy. Could I have your reaction to that? Thank you. Thank you. Sylvia Shavowska from the Polish Embassy. Just two questions. First, regarding the Ukraine, what must happen according to you so that the West decides to support non-little weapons to Ukraine? And the second one is concerns Syria. What are your plans to support moderate Syrian opposition? Thank you. Okay, we'll take one more. Yes, ma'am, the microphone's coming to you. Other side, ma'am. Hi, my name is Tara McHelvie. I work for the BBC. I'd like to ask you about cultural differences between Americans and Brits, something I am very interested in. And if you could talk about how US-UK cooperation is going, specifically about Islamic State, and I'm interested in hearing your action to the video. The last question, give me time to think about that. Let me start with the first one. I haven't seen, for channel 40s, I've not seen the video, I've seen a report of it. But I think if true, that illustrates again the depths of barbarity to which ISIL is sinking. And I think we'd all abhor the use of children in that particular beheading if that turns out to be true. Can I refute any suggestion that I'm here to deal with damage and do anything? I have set out today the facts of our engagement with the US, the operations we've been doing together successfully in Afghanistan. We are doing together successfully in the Middle East in checking the advance of ISIL and the common position that we share against Russian aggression in the Ukraine and to, as I said, to explore some of the innovation and the cooperation on new technologies that we're going to need as part of our joint offset strategy to better defend the international rules-based system. I have set out very specifically that it is, you know, we can still put a division in the field and I have noted Ambassador Parz's recognition of the exceptional contribution that we are making to NATO. So far as the 2% is concerned, I've made it clear that we are the ones meeting the 2%. We're meeting it this year. We're meeting it next year. Your question should be directed to those who are nowhere near the 2%, who are still below 1% of expenditure. So far as the question about ISIL is concerned, yes, we're reviewing today with Secretary Carter who was in the Middle East too just recently and we're reviewing the state of the campaign and what more needs to be done there, particularly to match some of the success that's being won on the ground and in the air with political progress too in ensuring that the ground that is being retaken from ISIL, Daesh, the ground that is retaken can be retaken with the support of the local population that the Abadi government can demonstrate to a wholly inclusive settlement in Iraq. So far as supplies to Ukraine are concerned, we have supplied a range of non-lethal equipment. We are considering further requests for non-lethal equipment from the Ukrainian Armed Forces and we are beginning our training support to those armed forces next week in the Ukraine that will include training to reduce the number of battlefield fatalities and casualties that they're taking to help them better protect themselves as well as some basic infantry training alongside that. That will begin next week, but obviously we will keep that under review as we see compliance with the Minsk agreements unfold. Now, there was a third question about, what was it, the culture? You said there would be tough questions. Explain how this US-UK, how are the cultural differences, maybe what is the security perspective first? Do you notice cultural differences in approaches or a guide to how to get along with those Americans? Well, as I illustrated in my speech, I think we do get along with those Americans. We did that side by side in Afghanistan. We're doing it side by side down in the headquarters in the Middle East. Planes are flying day by day, night by night alongside American bombers. We are working extremely closely, and I don't think you'll find a partnership that exists anywhere else between two other countries that is as deep and as as broad as our partnership with the United States. That's why it is your own president who described us as the indispensable partner, and we remain your indispensable partner. Well, I think that's a great way to end the conversation. The special relationship is still vibrant and active. Secretary Fallon, we thank you. You've gone through in great detail the capabilities and the strengths of the British military. We wish you the best success with your meeting with Secretary Carter, and of course we're going to be watching May 7th very closely. So with that, please join me in thanking Secretary Fallon.