of process that in sthens, you'll end up with a sort of mini-defense review, without the transparency and explicit weighing of priorities, that are -- a proper defense review provides. >> i think that is a very important question about the future, we have a strategic defense review, after19997 about the major things we have to document we have to add an additional chapter. new events changes terrorism, the growth of instability in different parts of the world, made it necessary for us to add a new chapter to the defense review. we have decided that there will be a footnote to the defense review and in the future will be defense reviews in every parliament but i think you would agree with me there has been an uncertainty about what has been happening in iraq and afghanistan, all of these years that we've made a conclusive defense review -- would have made a conclusive defense review

quite difficult and we have evaluated our needs for the future and this is the right time to go forward with a new defense review. i agree, also, that with what lies behind your question, that advanced thinking about defense needs over a long period of time must be part of the work of government and you cannot just respond day-to-day, and that is not what we have ever intended to do. we have intended to have a long term program of defense and modernization as well as meet the needs of iraq and afghanistan which we've done as fully as we can. >> on that point, to conclude this section before we go on to issues of reconstruction, you will be aware that, yesterday, the defense committee on the house of commons issued a report which seemed to imply continue news adjustments to the defense equipment program to contain equipment within budget made it hard for the minister of defense to deliver equipment to time and

cost. this is a concept you mentioned before, somehow, we haven't managed the equipment program well enough over the past decade to be able to produce the equipment which is needed for our forces at time and cost. >> there is an issue about procurement we have been dealing with these last for years. for example you buy a type 45 destroyer, and the original cost is half a billion and it actually costs a billion. these are problems of the procurement process that have to be dealt with. the attempt add cash contracts, is something that has been fraught also with difficulty. i think the second thing you have to remember is that we ordered for example, a new version of the lynx helicopter in 2005 and made the decision in 2005 but because of the procurement process and design and everything else associated with this, the new version of the lynx will not be ready until

2014 and there is the cost of procurement which have got to be got down, and so prices don't change so fast but you have to recognize the timeline in these major procurement programs and you decide something in '05 and cannot get the answers until -- equipment you want until 2014. these have all got to be taken into account as we do our strategic defense review and we've committed ourselves to publish the strategy for reform of acquisition and made a radical commitment to publish annual assessments of the overall affordability of our equipment plans and we are in a far better position, moving forward, to know how the program fits in with the resources that are available, to it, and i think we are learning lessons, about the procurement process, as well as about certain priorities, for the defense program, for future years, but i must repeat, that none of this would affect our ability to do what we needed to do in iraq, because that was additional

expenditure the minister of defense said was able to make and so they adaptation of challenger tanks or helicopters or the purchase of new helicopters was something we were able to do when we needed it and that was something we agreed on with the ministry of defense. >> as the example you gave, with the helicopters, illustrated one of the basic problems, that you -- the adaption of existing equipment and so on but the lead times to get new equipment in place, sometimes seemed quite extraordinary. >> that is why we bought additional... modified the chinooks so they would be available for use in this case in afghanistan. but i have to tell you, the helicopter budget is a -- $6 billion budget over the next ten years and we have a helicopter fleet of over 500, helicopters, the biggest in europe, in

western europe, the biggest in iraq and is afghanistan, other than america and the argument we have not funded our helicopter program, we've provided additional resources for helicopters and bought helicopters where we needed to do so, and you may know the helicopters we used in iraq they have to be adapted again for use in afghanistan. because the blades that are necessary for iraq are different from the blades necessary for the weather and mountainous and high territory of afghanistan. all the time, we are trying -- and these are decision for the military commanders on the ground -- trying to match the needs they have at a particular time with the resources we can make available and i would say on helicopters, the former ministry of defense parliament secretary made it clear when he spoke to the public accounts committee, we have provided, and in my judgment the military judgment, all of the military operational helicopter assets, needed for

success and that is in october, 2004, talking about iraq. on the needs that we have in iraq and afghanistan. we have provided all of the military operational helicopter assets needed for success and i hope the committee could note we have done everything we can to make the helicopter provision available including buying from other countries. >> yes, indeed but, it was suggested there was a 38% gap i think between what our needs and actual provision, so... >> talking about helicopters. >> yes. >> in helicopters we have a fleet -- a set of more than 500 and ordered 22 new chinook -- >> from the period of '04-'05, when the helicopter needs were growing. >> i'm telling you what the ministry of defense accounts committee told us in '04. >> the ministry of defense accounts committee gave me the number, for time i would like to

move quickly onto questions of the costs of reconstruction. you said before lunch that you were concerned about the aftermath of the war, looking at the war, in... coming up in the early months of 2003. and i think you said to us and i'm quoting, we couldn't persuade the americans that it had to be the priority that deserved. you mentioned a paper, that you brought to the cabinet subcommittee in early march that was to be shared with the americans. here we're about to invade and occupy another country. and we don't seem to have an agreed framework on what we were going to do about it. was... you were saying this morning, was it not itself a reason to delay until we were

properly prepared. >> no, we did a number of things. i have to say, there was agreement with the americans on the following things. we had immediately to try to put iraq in a sustainable economic footing and had then to leave international finance and reconstruction which led to the madrid conference, we had to secure international expertise on economic and financial policy, so we believed we could move forward quite quickly on a number of issues, debt relief, a new currency, new budgetary measures in iraq and setting the framework within which the reconstruction of iraq could take place, so, we did move forward on all of these issues. i think britain helped create the new iraq currencies and there were two when we started and we had to effectively pick up the old currency and hand out the new currency and treasury officials were traveling around iraq not in the safest way, having to give out the new currency, and prove the old currency in and we achieved the debt relief necessary for iraq

to move forward and gave them advice about the budget and the new financial law adopted in iraq, and it was as a result of the treasury's ability to persuade them they had to have a budgetary system and got money into the provinces and i agree with you on three things, what we needed then to do was build up the iraqi army and the iraqi police, and it was -- that they would at one point be able to manage their own security and secondly had to have a program for giving iraqis political power in their own country and that included local as well as national government and then we had to have a program for giving people an economic stake in the future of iraq. massive unemployment an under use of resources, and iraq, a potentially wealthy country. we had to set out a program also for economic reconstruction. now, it finally came together but took sometime for that to do so and when you look at our

efforts in basra, in particular, you will see that this was the foundation of the new approach to reconstruction we adopted, what i have called the just piece where people feel politically, economically and in security terms, have more control over the decisions that affect them in... >> i was asking, initially about what we could look forward to in march, 2003. and, as you indicated, all of these things, may or they not be coming together now, and they've taken an awfully long time to do so, and a lot of misery in between. >> the currency was quick and the debt relief followed pretty quickly and the financial laws came not too long afterwards, but, i agree with you, the point i was making this morning, that we had -- we are learning all the time that where there has to be intervention or where there is a failed state or where there is a conflict written state there -- ridden state there is such a thing as a just piece and you have to involve the people themselves and that is the

lesson i think we've learned from iraq, we are trying in afghanistan and is something that i think you probably need an international agency for, for stabilization, and reconstruction over -- that is set up to help with these tasks. >> it is a tough way for these lessons to be learned. a lot of grief between march, 2003, and, now. from which we have finally worked out some of the things that need to be done and part of the difficulty, and back to my original question, was that these sorts of needs were understood, that lessons have been learned from situations elsewhere. and that we were aware of the difficulties and dangers that could face our forces, and face any effort to reconstruction. and we were aware that the americans haven't quite taken this as seriously as we seem to be taking it. >> now, you have a situation, you could look back on, where -- in basra, for example, a million

people, 2 million population of basra, a million people have electricity and have water and 150 teachers and 15,000 new schools and 100 health centers, that has happened but it took a long time. you see, i never subscribed to what you might call the neoconservative proposition, that somehow the barrel of a gun, overnight, liberty or democracy could be conjured up and what i believed was that international law had to be observed but i also believe if you are rebuilding a country the people of that country have to be more intimately involved in the process of doing so. so, the earliest point, it was important that we had a -- iraqi army, iraqi police and iraqi... >> but the first thing that happened was the iraqi -- >> and running their own economy. >> the first thing happened was the iraqi army was disbanded, so for -- the problem is, come back to it, whatever it is like at the moment, the learning process

was by and large borne by the iraqi people, and, it was painful, and, unfortunately the views which you say you disagree with, may have been those that were predominant in washington, in march, 2003. and that is the... >> all i can say is, never a view i've agreed with but it is important to understand the iraqi army has been built up again and the iraqi police have been built up and when we left basra we were satisfied there were 30,000 police and army now trained to do the job, but our troops could be in a position to leave and be sure there was security control for the people of basra. >> just, very briefly, the costs of reconstruction. you gave a figure, i think before lunch of 45 billion pounds as an estimate and clearly these were costs that were unaffordable for the u.k. and the u.s., we talked a bit about international organizations.

to what extent did this -- even this number depend on assumptions about oil production, how it could be restored, and, to fund the reconstruction, within iraq. >> there were basically three sources of finance for iraq, one was we -- the coalition were prepared to provide. the second is what the international community could conjure up through the imf, and the world bank and through the madrid conference, where i think 500 -- can't remember the exact figure, but a lot of money was pledged to iraq. and then, certainly, iraq itself, because iraq had resources, there was trust funds, in relation to iraq that were able to provide resources back to the people of iraq but we had to create a budgetary system in iraq where the money was not held at the center but could be distributed to the regions, so basra could have some money, so a lot of our efforts were persuading the iraqi government and i spent a

bit of time trying do this, when we were established to transfer money from the center to basra itself and it was iraqi money to be used for much of the economic reconstruction, that had not -- not foreign money. >> that was later on. >> yes. >> just again, going back to the provisional authority, to 2003-4. you have mentioned already the role that the treasury secretary played in iraq, and... they achieved. other witnesses have said, one of the difficulties we faced in all of this was because we were a minority partners in the venture and found it rather difficult to exercise influence over how the coalition provisional authority worked. was that your experience? >> we were partners in the provisional authority. and my job, at that time, was to

work with the americans and with the iraqis, to ensure that money was available, for some of the economic tasks that we needed to be done and so we had to establish a currency and that was achieved and had to have a budget and law so that money could be distributed and that was achieved and we played a large part in doing that. but i accept the strategy we had to adopt, and, certainly, after the insurgency, the sunni insurgency came about was one whereas general petraeus said we had to build support from the people themselves, and that was really the next stage that had to happen. >> just again, going back to this earlier period, we were joint occupying powers. as a senior member of the government, were you comfortable with the fact we had taken on this position as joint occupying powers when we were going to find it very difficult to be --

play the same sort of role because we didn't have the resources, the americans would be able to put into it. >> i did visit iraq, myself, on two occasions when i was chancellor, to look at what was happening on the ground, but my visits were mainly, i did go to baghdad, but i was also interested in how we could develop the area of basra and so my concerns, after the initial work and debt relief, on the question of the currency, my concerns were, could we construct an economic e plan for basra that would allow the people to see the benefits of prosperity flowing from the absence or reduction of violence, and i think that was the key task we then face and over the next few years, that is what we did and i wasn't myself directly involved with the negotiation on the cpe. >> okay, and the final question, following on from what you said, do you think you were able to

ensure adequate funding for the basra area while you were chancellor. >> yes, we did get additional funding into basra. we had health and education as a priority so people could see that life was changing and improving. and we had a lot of quick impact projects that would allow people to get jobs and we had a project for employing 500 young people, in basra, as a symbol that people could get jobs under the policies and trained up a lot of teachers and all of these things were starting to happen in basra, but, of course, we add also the influence of iranian elements in basra, in the province, and we had the upsurge of violence in the the period after i became prime minister, and these are matters we had to deal with as well. es. >> in practice, all these factors were difficult to get at the economic reinstruction, in until very late... >> as long as the level of

violence is high, it is very difficult to persuade people that the... they will have prosperity but, equally, if you can show people there is a way forward economically for them to have a stake in the future the risk of them supporting violence is less and we had always to try to move our economic programs forward, basra i think, people will understand is one of the potentially richest areas in the whole region and has a port that was -- i have toured around, that is capable of massive development. and is simply is left unused and deserted by the policies of saddam hussein. so there is a potential source not only of oil revenues but of port and trade, and development in the basra area. and we wanted to show that this could be improved. >> i think, we'll do a bit more after the break. >> this is the moment for a break and after that, we'll turn to your time as prime minister.

>> thank you. [inaudible conversations]. >> i'd like the prime minister to turn to the time since june 2007, when you are prime

minister. and i've asked martin gilbert to ask you question. >> good afternoon. >> you visited basra in november 2006, as a result of your experiences then, and the events in the 7 months that followed, what other aspects of british policy in iraq that you felt needed to be changed when you became prime minister. >> my focus was on the area for which we had responsibility. and, i looked carefully, initially, of course with tony blair because he made a statement to the house of commons in 2007, of what we hoped to do to reduce the number of troops and improve how the iraqi army were policed and were trained and my determination was we created the context in which iraqis, i.e. the people of basra had more control over their own affairs and had to build up the training of the iraqi forces and the training of the iraqi police, and we did that. and, eventually, i think we have trained 20,000 iraqi forces,

then we have to make sure that local government elections took place, so that there was some stability which was not the man of violence holding the ring, it was people who were directly elected who were capable of making decisions, and i planned and we drought in, mr. michael waring, who did a great job, to head up our basra development effort and through the beginning of 2007 as i visited iraq and as tony blair made his new statement, in the house of commons, we were planning what we called overwatch and would move from tactical overwatch as we were there as the forces but iraqis were involved in the maintenance of stability and law and order, and then we'd move to what we called operational overwatch, which gave the iraqis far more control themselves, of their own affairs, and we moved

then to strategic overwatch which what is we eventually did and stood back, the iraqis had the control of their own security and we had a reintervention capability if it was necessary. so at one and the same time we followed through this political and military security, if you like, economic strategy, at the same time, our troops were positioning themselves so that iraqis could take more responsibility for their own affairs and it went into deeper commitment to all of these things, during the course of 2007 and 2008. >> in terms of timetable, your visit to the u.s., in july, 2007, what did you know of american concerns that a change in the british prime minister would mean a change in the timetable of our plans? to transition and draw down. >> i had spoken to president bush before i became prime minister and talked to him about the commitment we had to finish the job in basra, in particular,

and we had a lot of our military personally assisting in baghdad and other parts of the country, but our main effort by then was concentrated on basra and i talked to president bush about our plans for developing our strategy, in basra, over time, we would be reducing the number of troops, but, only as the iraqis were capable of taking control of law and order in that area and he was perfectly satisfied with what we were doing and we had, fairly applicable conversations, both before i became prime minister and after i became prime minister, when i visited in america. we had a series of phone calls as well, during the summer of 2007 as we developed this new strategy and then i reported to the house of commons, in october, not only about what we would do, in basra and how we'd set the conditions for the next period of time, but, also, about what we would do on troop levels. >> were there any difficulties, in adjusting the alignment between our policy and that of

the united states. >> no, i think they were happy that we were in a position -- they had been dealing with the sunni insurgency, so, general petraeus was dealing with that insurgency with new tactics in baghdad and the surrounding areas and the province, where al qaeda had made progress, he was dealing with this... with the efforts they made. and we were a different area, at basra, and we had a local insurgency and some of it was inspired by iran, and, we wanted to set the conditions in which the iraqis would have more control and that is why we left basra palace in the autumn of 2007 and why we made sure that we were training enough iraqi troops so the control of law and order in basra would gradually move to the iraqis. >> one more focus on july, 2007. in your discussions and contacts with prime minister maliki, what did he ask for, in terms of our

continuing presence, generally, in iraq and, in particular, in basra and the southeast, and, was this something you felt you could do in terms of what he wanted you to do. >> well, i think having become prime minister of iraq, he was quite legitimately and understandably wanting to assert the iraqi influence, over all of iraq and i understood that because we wanted them to be in a position also where the iraqis could take security control over the whole country. but i stressed to him that we wouldn't leave until we felt the job had been done and we'd continue to work for these, really, there were three objectives, that we had to meet and once we had met them we'd expect iraqis to be able to take full security control of baz remarks and we were operating on a strategy that would allow us as the iraqi forces rose in number and were trained properly to do things, to reduce our

number of troops and there were hiccups because we had to deal with the -- some militias, we also had to deal with the slowness in which -- of getting local elections. and we had to deal with the issues that arose from the charge of the night and all of these had to be settled and we wanted to build up the iraqi forces to be in a position to remove our troops over time. >> and he had to accept, this was our decision, we had fulfilled these -- >> and he understood that there was a debate, of course about the conditions under which we stayed in iraq after the end of 2008, and that was a debate that we had with the iraqis, because, parliament wouldn't pass the requisite legislation but we had a memorandum of understanding, that prime minister maliki and i, we spoke a great deal, we talked a lot about the issues that arose, and i was certain with him, that we would not leave until we had finished the task we set out to do.

>> i'd like to raise another issue now which several witnesses have discussed with us. by the time you became prime minister, the end of june, 2007, the british military was committed in both afghanistan and iraq, and there were plans already to increase our commitment, in afghanistan. while afghanistan is clearly outside the region of this inquiry we understand the scale of military commitments there. it may have ekt faked what the u.k. could attempt in iraq and i'd like to ask you, to what extent did the increasing scale of british military commitments in afghanistan affect what we could do in iraq? >> at no point would i say -- clearly i'll say, at no point were the needs of iraq neglected because of other things that we had to do. we were on a trajectory, of course where we could see we'd be reducing the number of troops in iraq, and although not every

figure could be met, partly because of the charge of the knights and partly because of the insurgency we knew what we wanted to do but nothing in iraq suffered because of our commitments to afghanistan, or to any other arena. we were determined to complete the work that we had started in iraq, and that led us over a period of time, to bring it down to stay at 2-and-a-half thousand and it was right to keep the force levels that were necessary, while there was a hint violence would reoccur. >> what advice were you getting from the mod and military chiefs with regard to the stresses and strains running two medium scale during operations, simultaneously and the effect it would inevitably have on the armed forces? >> this is one of the few periods, of course, in our recent history, when you have

had two operations mounted simultaneously and i think we have to recognize the length of these ventures, you know, since 2001 in afghanistan and 2003 in iraq, is particularly stretching for our forceses but nasa chief of the defense staff said our forces were stretched, not overstretched and we had to recognize that, obviously the additional forces that he provided for equipment were there but we had to recognize that we had to complete the tasks in iraq as well as conduct the operations we had agreed into afghanistan, and we have done both to the best of our ability. >> there was no sense, the military draw-down had to be a priority in iraq because of the afghan commitment. >> i think we had reached a point in iraq, where, if we could secure the conditions i talked about, the security, and, greater political control by the's, and the beginnings,

indeed, the push for economic development, that this was the right time, as prime minister maliki wanted, of course, for iraq to be able to take more control over their own affairs and eventually take full control of their own affairs. >> you mentioned the situation in basra, and by the time you became prime minister basra palace, our main base, in basra itself was said to be the most heavily rocketed and mortared place in iraq and merely sustaining our troops there was putting them at a very high risk indeed. did you feel that after leaving basra palace we'd be able to establish a viable overwatch on the city from the airport. >> i think the evidence is that while it was reported differently, people felt, we had left the basra palace under pressure and reality was different and it was our strategy, to lead basra -- leave the palace and base ourselves at the airport. that was part of moving from tactical overwatch, to operational overwatch and strategic overwatch and, our

reintervention capability was able from being at the airport and, obviously we wanted the iraqis to take full control of basra themselves. and our strategy, therefore, of leaving the palace, going to the airport, was the right one, i think you can see and monitor the decline in violence that took place after that, and, perhaps, you will get evidence before the committee, about the reductions in violence, that followed us moving to the airport. >> were the americans concerned about what would be a three-and-a-half month gap between what would be iraqi control in basra, and our being unable, really to influence the situation inside the city. >> no, i don't think this was a big issue at that time. there were issues that arose over the charge of the knights, which came later and perhaps you want to raise that. >> you announced in parliament, in october, 2007, the plan to draw down the forces, in southern iraq from 5500 to 2500

troops, from the spring of 2008. can you tell us something of the process by which you made the decision to reduce to that level, and that time scale, and what advice you were getting from the military. >> after i became prime minister i did three things, having talked to tony blair at some length about these issues i did three things. i talk to the americans in detail and, therefore i had a visit with president bush and several video conference and phone calls with the americans. secondly, i obviously talked to prime minister maliki about the situation in iraq, and, mainly, of course i talked to our own commanders and what their advice was about the way forward. now, tony blair earlier in the year announced our intention to go down to 5.5,000 forces, and we had by the summer got down to 5.5%, and i felt we could go down further and so, we went -- and actually went down to 4.5,000 and i felt we could set a longer term objective based on

these conditions, really, that was a point at which we established the conditions, in which we would be leaving iraq. that we would be sure that we had 30,000 police and armed forces, so we had the 14th division was built up in iraq, by the iraqi government, and as these numbers grew, we felt we could reduce our numbers, so the iraqi forces were growing in numbers, i think, in january, 2007, there was 10,000 and by november, it was 12.5 thousand and... >> with us training. >> with us training them and them in a position to take over security responsibilities and then training the police and then, the local government election which were postponed but eventually happened with a very large number of candidates, very large number of people wanting to stand for office and it showed the potential for democracy in that area and michael waring's economic

development plan and we held a number of investment conference and invited companies from britain and other people to meet us on downing street and had a conference in iraq and london and moved forward with the economic agenda as well and we had a real plan for these three things to change, over the course of the next year or so, and we worked through that, despite all of the difficulties that arose with the charge of the knights and everything else. >> and, the last several questions is about this economic plan, because, in your speech, of the 8th of october, 2007, where you announced the draw down in forces, you also stressed in the statement that in addition to both the political and security help, which the u.k. could give iraq we'd make a particular effort in this economic sphere. my first question, in this regard, is, was this something you felt could be done despite the precarious security situation and how did that have an impact on your conception of the economic -- >> i think the implication of your question is right, security

and development have to go hand-in-hand and you cannot have one without the other and you have to try to have both at the same time and our security numbers were built up with the growth of the iraqi police and armed forces but the potential for economic development was obvious -- i learned the lesson from work i was involved in, in northern ireland, that if you can show people that there is economic prosperity possible, then the risks of returning to violence are seen by people, to be too great. to put at risk something they were now about to enjoy, so, i wanted to show in basra as did michael waring of the economic development team, that the chances of prosperity were something people should value and not put that at risk, by allowing the militias to have control in the area. i think gradually people have begun to see the economic advantages, that are available to them, mean that encouraging or even doll rating violence is unacceptable and basra has

proved, you can move forward in economic development, and i think that is one of the lessons, to be learned, for other conflict areas, including the middle east that if you can create a level of economic development, then people will resist the violence and will be prepared by having a stake in the economic future to accept democratic processes of government rather than the role of militias. >> you spoke in september '07 about britain's stake in the future, initiative in iraq and in november, 2007 you spoke of the need to show iraqis that there was a peace dividend and can you explain by whew meant as a stake in the future and who were the main u.k. contributors to the peace dividend initiative. >> that was first of all, of course training the forces and making sure that there was the possibility of peace with iraqis in control, but it was

essentially the economic development of the area. so, we were trying to persuade british businesses to invest in the basra area, and we were also trying per -- i met local business people in basra, and tried to encourage them about the potential for the development of the area. as i said, earlier, i -- i toured the basra port area and it was full of wrecks from the iraq-iran war and yet, it was a port with huge potential for the future and we tried to get people interested in developing the port, tried to get young people into jobs, did quick impact projects that helped people see the infrastructure improvements were happening, got health centers and schools opened again, and, these were the ways that we were trying to show people in basra, that there was a way ahead, that didn't involve violence for the future. >> at the time of our withdrawal from basra palace to the airport, there are those who have given us evidence, those

who were involved, who said at that time we had become part of the problem in iraq. how do you assess the impact of your economic initiatives on the whole southeast region in terms of britain's standing in iraq from being part of the problem to being something else? >> it was very important to recognize, that all of this time, we did not want to be seen as occupiers. we wanted to be seen as people who are making it possible, empowering the iraqi people to take control. so the step from basra palace to the airport was the logical step of people who wanted to see the iraqis taking security control of their areas, and so i don't agree with those who say that it was either a mistaken thing to do sore it was done under huge pressure. it was the right thing to do as part of our strategy. but, the economic development of basra, is in my view, an important element of the greater piece that exists in that part

of iraq, now. and, we have now got very good trade relationships, with iraq, but, more important, i think we should be proud that people like likal waring were prepared to devote huge amounts of time as a british citizen, going out to iraq and building the contacts with local begin answers trying to get infrastructure projects underway and encouraging foreign investors to come into iraq, and, economic development must be part of any strategy that we have in afghanistan, and in any area, where there is conflict around the world or a failed state, you've got to have an economic level. to the -- what i call the building of a just peace where you can work very hard to win the battles, but you've got to win the support of the people as well, by showing that you are in a position to make it possible for them to deliver a better standard of living for themselves. >> you mentioned, prime minister, the charge of the knights and i wonder if i could turn perhaps, to sir roderick on

that score. >> right. yes, this of course is the operation the prime minister maliki launched in march of 2008. to take on the militias in basra, and to establish control. did you have advance warning from prime minister maliki that he was going to do this? >> no, we knew there was going to be an operation at some point, but we didn't have advanced knowledge of the timing of it. but, in retrospect, i think it is pretty clear that this was something that was needed for maliki to show that he had control over his own area and he was prepared to take on militants even in his own religion. >> it was needed. but we at the time were in the lead role in maintaining security there. we had that responsibility. so in an ideal world, should we have actually been consulted on the timing of it?

>> i think in an ideal world it would have been better if he consulted us but in retrospect what we looked at is exactly what we wanted to see the iraqis asserting their own ability to control their own security. and, over a period of time, of course, the iraqis have been able to do that, so, for me, while it was a difficult period, obviously, it -- in retrospect it was the right thing to see happen. >> did his decision to do this reflect a sense that armed forces, the u.k. forces, were no longer capable of restoring security in basra, that we had, in effect, allowed the militias to make control of the city. >> well, i think you know that -- the background to this, and the work that we did with jam, in basra. and i think that background perhaps explains more about what

was happening during that period of time than has been acknowledged. and i'm happy to go into details of it but it involves our security services. >> with different aspect to this but we had been in basra by this stage for five years and over that time, the situation had become more difficult and we reached the point where effectively something had to happen from baghdad while we were still maintaining a large number of combat troops, in basra, so, something of that period had got out of our grasp. >> i think when people look at the full facts of this, they will understand why prime minister maliki wanted to act. and, they will also understand the role that we were playing, in basra, was a role in reducing the violence, and so, i don't draw the same conclusion that

some people draw, that there was some sort of conflict of interest, between the iraqi authorities and the british armed forces, at this time. quite the opposite. we were trying to get to the same position, and, perhaps, each had not fully informed the other about what was at stake here. >> but, didn't... the timetable for drawing down our forces at this stage, it was too rapid. >> we meaimmediately made a statement to the house of commons, that we'd maintain the level of forces, 4100. >> we put it on hold for a while. >> and we wanted to be absolutely sure. but look we had gone so far in establishing army army and iraqi police forces as being the important operator in the area, and we did not want to see the work that we had engaged in and started, undone. so, the right thing to do was to suspend the reduction of forces, and that is what we did for nearly, well, many, many months afterwards.

>> if i could turn to another aspect of the iraqiization of rung events in basra, from the southeast, going back to your conversation with sir martin gilbert about your economic initiatives, why did it require your personal involvement as prime minister, to get these initiatives going? i mean, shouldn't something have been done on these lines a long time before, given that we had responsibility in the region for a number of years. >> these started when i was chancellor with the thought of tone -- with tony blair as prime minister but to be honest one of the difficulties we had was that the iraqi central government would not make the decisions that were necessary to either release resources, or to make it possible for projects to happen in basra. so, we were dealing with the business community who might have been prepared to invest, and, us as the government pushing things forward, but, also the iraqi authorities, and it was difficult to get things

moving, from the center in baghdad, when you needed decisions that would speed up economic development, in basra. so, we were trying at all times to deal with the iraqi government and not in place of them but it was difficult to get decisions made and eventually of course we appointed someone, michael waring and we set up a basra development commission, i think it was more indigenous in its activity than previously had been to move things forward. >> that brings me to my next point. i mean, you have described to us your concept of building a just peace in iraq and the essence of this being that the local people should be able to take control of their own liveses. but, in this particular instance, your frustration was that this was being impeded in baghdad. we weren't able to get off the ground fast enough, because they weren't taking ownership in baghdad, and, so, in effect you and michael waring and others

had to give a lead from outside, whereas, really, by then, iraqi government had been in power, maliki's government for quite some time, should have been their initiatives rather than ours. >> i think it is a bit like operation overwatch, where, gradually you move to a situation where the iraqis have more control over themselves but it has definitely been the case, there was a tension between the center and the locality and there is the case getting money out of the central government for basra, was difficult. but, i think over time, these are issues that any country has to resolve about the relative power of the region and the center, and i think iraq is having to deal with that problem itself. >> so when you set up the basra development commission, you at that point get full support from prime minister maliki for night maliki was very keen on basra, basra development. i think in iraq, they have a strong sense that they can be a very strong country, economically.

but, obviously, it required as you have rightly said, the push of some of our investors, and, particularly, michael waring to get it moving forward so we had to hold investment conferences, i held two meetings at downing street with potential investors, and i met business leaders, as i said to sir martin gilbert in basra to talk about how they could move it forward. >> and we were doing this, at a time when our civilian staff that had to be evacuated from the city, had -- out to the airport, how much did our ability to promote economic initiatives, how much was it impeded by the fact that the form office and the dfid staff were actually holed up in the cob at the airport? >> well, i think over time, this was the right strategy, of course, that -- >> we had to do it for the reasons of austerity -- >> but over time it was the right strategy, we let the iraqis have more control and i think the development work

proceeded even amongst the difficulties of the violence, there, in basra. a lot of economic development work was moving forward. so, i don't think that was the great hold-up of this. i would point, more, to the difficulties of getting decisions from baghdad. and, also, of course, that, you know, these -- some of them were big infrastructure projects and we got people interested in the port because it is such a huge infrastructure project but it was such a big project that investors were reluctant to finally commit to it. >> thank you. >> thanks. prime minister, i'd like to finish this hearing with one quite specific question which is puzzling the committee at this stage and then a more general one and to invite general re flexes you would like to make. this specific one really touches on policing. you have said and so indeed have others that security is establish -- establishing security is the necessary precondition for economic

development, for political engagement and for the establishment of human rights, in failing or flawed societies and we have had much evidence about the problem of establishing an effective and incorrupt police service. in really setting up the pillars for the just peace that you have described, and, i wonder whether you have a view, yet, as to whether we have the right concept, even, let alone the answer, to establishing an effective policing service, in countries such as iraq or indeed, afghanistan. >> this is an issue we are dealing with, particularly, at the moment, in afghanistan, so, it is an issue about how you train, and -- because you have to make a decision about what you are trying to train, people to do. and there is a system of policing that is more if you like military related, and a system of policing that is more in touch with the local population. you know, the problems we found

in both places, is the potential for corruption. and the problem in some of the policing in basra was that people who are part of the insurgency had in vagualed themselves, into the police staff and there were a number of incidents related to these sort of things and the best policing for the longer term is the one where the police are more in touch with the civilian population and the civilian population have confidence in the police and therefore while you may have to go through a phase where the police are for closer to a military model than you would like, i think in the end you want to have a strong army, that is properly trained and led, and you want to have a civilian police force that is able to maintain contact with the local community and is respected and trusted and for that, you probably need local people, doing the job, a lot of police have been imported in, in afghanistan and iraq to particular areas and you

certainly need corrupt-free police and what we have learned is you have to pay the police properly in these countries, otherwise they will not do the job that is intended. but i think it is a big debate, actually, about whether you follow different countries' models of policing in countries like iraq and afghanistan, but the best is surely a civilian model and you move from a heavy handed approach to a light-touch approach and you're more in touch with the local community. >> but not to be achieved or expecting to be achieved in one go. >> no -- >> sequential thing. >> this is also a lesson we have got to learn, you cannot, as i said earlier, conjure up democracy overnight in a country that has been a dictatorship for years. and, therefore you have to be realistic about the objectives that you set. and i think after 2007, we set ourselves clear objectives about what we could achieve so that

iraqis had a sense that they were in control of their own area but these were not unrealistic objectives inspecting that magically we'd have a police force that was totally free of corruption. >> thank you. i've got one broad question before -- coming to the end of the hearing. it is this: clearly, life in iraq today is almost incomparableably much improved, indeed, since the aftermath of the invasion. we have elections coming up, and fewer attacks and casualties, though they do continue and economic life is resuming, and not the least in southeast, basra but after the 7 years of our engagement, serious acts of terrorism do continue. we have heard quite a lot of evidence that, although there is a degree of stability, and the establishment of democracy, this

is still fragile and not to be relied on completely and the u.s. is still going to keep a large body of troops in the country. by agreement. for as long as it may steak. -- may take. looking at the whole history, of our engagement in iraq, prime minister, over the past 7 years, has it actually contributed sufficiently and materially, both to the creation of a new international order, if you like, certainly the just peace concept, and the greater respect for international law, with sufficient consensus among the comity of nations? or, are we still, as it were, in an uncertain or interim or conditional state, so far as iraq goes? >> i think these are the right questions to ask, first of all, as far as the international community is concerned, i think there is progress and recognition america and europe must work more closely together and we've had international institutions like the g-20 that

are strong and britain, america, france and germany talk regularly about issues they need to deal with in common, in contrast to what happened before, and, i think that recognition does exist, that you have to build up the international communities and institutions, otherwise, other countries and failed states will feel free to take action and it raises the question of iran and other countries. as far as iraq is concerned, it seems to me that you have to look at what the alternative would have been. we found a country where there were millions of people who were without work or without proper sustenance and who had been neglected by the regime and there is no doubt that the improvement in the conditions of livin living of people in iraq, schooling, hospitals, jobs, the ability to use and get the

wealth of iraq for their own people is improved. but, obviously, the loss of life is something that makes us all sad, and the loss of life, particularly, after the success of the initial military operation to move saddam hussein is something that is -- makes me very sad indeed, and we have got to recognize that war may be necessary but war is also tragic and the impact it has on people's lives. >> i think we have come to the close of this hearing. bearing in mind what you have said, prime minister, and, indeed, sir lawrence friedman's earlier reference to the cost of these lessons, to the iraqis themselves as well as to our armed forces and others, you have dealt with that, from the beginning of this hearing and now, again, at the end. any further or final reflexes on that or other aspects that you

would like to bring out before we finally close. >> if you would allow me to say i do believe i haven't had the chance to pay full tribute to our armed forces and the great work that they do and i hope one of the lessons we learn from this is that we are the most professional and have the best armed forces in the world. i think i also want to recognize that these were difficult decisions. these were decisions that required judgment. these were decisions that required strong leadership, these were decisions that were debated, and divided, a lot of opinion in the country. i believe they were the right decisions, i believe we made the right decisions for the right reasons. but, i also believe it is our duty to learn lessons from what has happened. this is a new era, after the cold war. i want europe and america to work more closely together because i believe that is the

basis of the international order of the future, if europe and america can work closely together, then we have a better chance of having international institutions that can prevent war, intervene where there are failed states, and can take action which has the consents tulle support of the international community. so, one of the lessons i learned from this is that europe and america must work more closely together and must be more determined to change the shape of international institutions that were found to be wanting and could not do the things we wanted them to do. i think as a government in britain, we have to learn that in this new world where there is instability, instability, both because of states that are potentially dangerous, but, also, because there is terrorism, that is nonstate, that our structures of government have to reflect that this is a constant worry, and this is not an incidental happening and we have to be better prepared in the future for reconstruction of countries and i believe that is an

international responsibility and should not simply be the responsibility of one country or one or two countries. i want to end by emphasizing if you allow me to do so, that the soldiers and the civilians who gave their lives, in iraq, they deserve both our sympathy and our debt of gratitude. and, no one who makes the decisions that cabinets and governments have to make, can do so without recognizing that lives are affected, and sometimes lives are lost as a result of the big decisions and big challenges we have to meet so i want to us recognize that 179 people who are from the service families lost their lives and also civilians lost their lives in iraq and we have to bear that in mind in all of the decisions we make another future. >> thank you, prime minister. i should like on behalf of the committee, as well as myself, to thank you, and, to