The Minister of State, Ministry of Defence (Earl Howe) (Con)
My Lords, I begin by congratulating the noble Lord, Lord Soley, on securing this important debate and by thanking all noble Lords who have spoken for their thoughtful and informed contributions. The wording of the noble Lord’s Motion reminds us of our nation’s proud history as a global force for good, and I agree fully with what he said about the role of the Armed Forces in that context. For the UK, it has long been a matter of principle that we should play a leading role in upholding global peace, stability and security. In many respects, in preparing to leave the European Union we prepare for a moment of great change for our country, but not in this regard. The Government are committed to an ordered, open and fair world, and to having Armed Forces that can contribute fully to maintaining that reality.
I agree with the overall approach of the noble Lord, Lord Soley, to the Motion he has tabled. At a time when the global security context is becoming increasingly challenging, it is right that we should reflect on our place in the world. State-on-state competition and regional instability are on the rise. The coalition is close to defeating Daesh in Iraq and Syria but this will not bring an end to the larger conflict. Meanwhile, Libya and Yemen continue to be gripped by unrest, while Lebanon is fighting to avoid political crisis. We have all witnessed the growing tensions in that region, especially between Saudi Arabia and Iran. In the Asia-Pacific region, North Korea’s tests of nuclear and ballistic missiles cannot be tolerated. Kim Jong-un risks destabilising the entire region and undermining the UN’s nuclear non-proliferation treaty. This grave situation is not helped by high tensions in the South China Sea, where the threat of militarisation looms.
Closer to home, violence and discord have flared on NATO’s eastern flank. I listened with respect and care, as I always do, to my noble friend Lord Cormack but in Crimea and in the Donbass, Russia has employed deceit, pretence and brute force to violate Ukrainian sovereignty. In Syria, Russia is propping up a regime that holds no qualms about the use of chemical weapons, including on civilians. In the North Atlantic, it is probing NATO’s resolve through increased maritime activity and of course, whether through hacking high-profile targets or polluting national conversation, Russia has sought to influence and disrupt democratic processes across the NATO membership. Of course, dialogue with Russia is desirable but we can judge Russia only by its actions, and many of those actions are unacceptable.
Russia is not alone in using cyberactivity to target UK interests. There has been a steep rise in cyberactivity by both state and non-state actors. In its first year, the National Cyber Security Centre has responded to almost 600 serious incidents. We all recall the WannaCry ransomware in May and the hack on Parliament in June. In addition to these high-profile cases, hundreds more have targeted British businesses and private citizens, threatening our prosperity and our peace of mind.
Finally, we have recently seen a dramatic rise in terrorist activity. In the Euro-Atlantic region alone this year, there have been incidents in the United States, France, Germany, Norway, Sweden, Finland, the Netherlands, Belgium, Spain and of course on five occasions in the UK. Throughout the Middle East, Africa and Asia, violent Islamic extremism has blighted the lives of countless innocent civilians.
This daunting list makes clear the extent to which global peace, security and stability are under threat. The Government’s 2015 strategic defence and security review anticipated these challenges and we set out an ambitious plan for defence in response. I say to the noble Lord, Lord Tunnicliffe, that we are committed to publishing the annual reviews on the SDSR. But we underestimated the pace at which the challenges would accelerate, and their cumulative impact on us and our allies. In the light of this, the only responsible action is to review our plans to make sure that we are as efficient and effective as possible in securing our homeland, and in strengthening the institutions that safeguard global security.
The noble Lord, Lord Soley, was again right that the UK has a unique role to play on the world stage in matters of defence and security. We must consider how best to play that role in this more troubled strategic context. The Ministry of Defence aims to use the current review of national security capabilities to address that question. I say again to the noble Lord, Lord Tunnicliffe, that this is a cross-government review and we expect Ministers to consider its outcome towards the end of the year. It will then be for the Cabinet Office to determine the next steps.
Your Lordships, in particular my noble friend Lord Selkirk and the noble Lord, Lord Bilimoria, will appreciate that there is little I can say at present about potential outcomes of the review. Evidence is still being considered, analysis conducted and options developed. Absolutely no decisions have been reached. Indeed, recent media reporting on potential NSCR options, whether HMS “Bulwark” and HMS “Albion” or anything else, has been highly misleading, speculative and deeply unhelpful to the men and women of the Armed Forces. However, I can tell the House about some of the principles guiding the department’s work on this review. First and foremost—I hope the noble Lord, Lord Soley, will welcome this—we must understand how to spend our growing budget more intelligently to emphasise those capabilities that are most effective at keeping us safe, most valued by our allies and most feared by our foes.
As ever, that begins with the foundation of our collective security: NATO. I very much agree with what the noble Lord, Lord West, said on that theme, and with the experienced observations of the noble Lord, Lord Owen. Today, in the face of the growing threats that I have described, we must reinforce the alliance once more. We aim to modernise and strengthen our Armed Forces, as well as NATO. For the UK, that means identifying and bolstering what is unique about our contribution to the alliance. For NATO as a whole, that means ensuring that together we possess the right combination of conventional and innovative capabilities to deter and defeat our adversaries. This includes refining our ability to combine all the levers of national power—military, economic, diplomatic—in the service of our security.
Beyond NATO, the UK must continue to use its status as a global power for good. I listened with care and respect to the noble Lord, Lord McConnell. To safeguard and strengthen the Euro-Atlantic alliance, UK defence must also be able to strengthen international security more broadly. Our leading role in the UN is vital in this regard. This year, we have increased our commitment to UN peacekeeping operations, notably the almost 400 troops we are contributing to the UN mission in South Sudan, which was mentioned by the noble Earl, Lord Sandwich. In fact, South Sudan is a classic example of the UK supporting peace and stability in fragile areas of the world. Equally important is our network of alliances and partnerships throughout the world. That is why we are also using the review to consider how we can do more to make our Armed Forces even more complementary to, and interoperable with, those of our allies and partners across the world. By doing so we stand to deepen our collective defence.
In response to the noble Lord, Lord Wallace, who put this conversation into the European context, we are a global player. We will remain engaged in the world and central to European foreign and security policy after we leave the EU. This is very much the desire of Ministers. As we have repeatedly made clear, we are leaving the EU, but we are not leaving Europe. We are committed to playing a leading role on Euro-Atlantic security. Our defence budget is the largest in NATO after the US and we are one of two European nuclear weapons states. Opportunities to engage are continuous, so it is not possible for me to capture the full range of what those extensive engagements might look like, but we have seen several examples in recent years.
The noble Lord, Lord Soley, said that we should be spending 3% of GDP, not 2%, on defence. That call was repeated by my noble friend Lord Sterling, the noble Lord, Lord Bew, and other noble Lords. Of course we could do more if we had more money, and 2% is a minimum, not a target. We are in fact spending more than 2% at the moment and the defence budget is rising every year of this Parliament, but we have to balance the demand for funding across the whole of government. The noble and gallant Lord, Lord Craig, was right to say that the real issue is not inputs but capabilities, including, as he pointed out, resilience. I encourage the House to think in terms of what defence is able to do around the world, and not about size alone. The Government are committed to ensuring that Britain’s Armed Forces can continue to make their crucial contribution to Britain’s status as a global power.
The noble Lord, Lord Hutton of Furness, expressed scepticism about the rationale for the NSCR. The national security capability review is being conducted in support of the implementation of SDSR 15. Its aims are clear—to ensure that our investment in national security capabilities is as effective, efficient and joined up as possible. It is a strategic exercise as well as, of course, a financial one, as all such reviews should be.
However, the noble and gallant Lord, Lord Boyce, was completely wrong in what he said about the efficiency programme. The department is more than a year into its five-year efficiency programme, and it is already forecasting line of sight to 90% of our challenging £7.4 billion formal target, as set out by Her Majesty’s Treasury. As this is an efficiency programme, it is about savings that need to be made without adversely affecting defence outputs. We are achieving this by, for example, saving more than £2 billion in the way we procure equipment and £600 million by implementing the single-source contract regulations and equipment support contracts, and by how we procure complex weapons and a reduction in the size of our civilian workforce. A mass of work streams is contributing to that effort.
The noble Lord, Lord West, referred to the hollowing out, as he put it, of the Armed Forces. I cannot agree with those comments, any more than I can with similar comments from the noble Lord, Lord Lee. It is an overplayed mantra. The Armed Forces are meeting all their commitments across the world within all the bilateral and multilateral relationships that the noble Lord, Lord West, named. The Government will ensure that they continue to do so. Of course recruitment is challenging across the piece. The Armed Forces are fully funded to recruit the current liability and the force structures set out in SDSR 15. They are currently recruiting through active and targeted campaigns and are increasing engagement and activity in those communities from which the Armed Forces have historically not recruited.
Lord West of Spithead
Is it not true, however, that there was a reduction of 4,000 in the recruitment ceiling in the Royal Navy as part of SDSR 2010 and the Navy has been allowed only 400 back? Therefore it cannot recruit to a higher level to try to fill the spaces that are missing. This is part of the reason that it has ships alongside because it cannot man them and part of the reason for the pressure to look at other ways of manning. That is the reason that this has happened. It is because there is insufficient money to set a ceiling that makes sense tying in with the equipment that the Navy has to man.
Earl Howe
Opinions can differ about what that ceiling should be. All I can tell the noble Lord, Lord West, is that the Navy tells us that it is working towards a target that it believes is credible and workable.
Turning to the comments of the noble Earl, Lord Cork and Orrery, between October 2016 and September 2017 we have seen a positive degree of progress in recruitment and retention, especially in outflow. Outflow has improved with fewer people leaving the full-time Armed Forces over that period compared to previous years. We are not out of the woods yet, but we are progressing. The noble Earl also questioned whether we would have enough personnel to man the aircraft carriers. There is no direct relationship between the size of a vessel and the manpower required to operate it. Technology has allowed manpower efficiencies over time. I can assure the noble Earl that the carriers will be appropriately manned to ensure that they can always operate effectively and safely. We are confident that with the uplift in numbers that has been announced and through an ongoing process of internal reprioritisation, the Navy will have sufficient manpower to crew both aircraft carriers and the Dreadnought submarines.
The noble Earl also mentioned pay. We welcome the Treasury’s decision to allow greater flexibility for public sector pay, and we acknowledge that the Armed Forces are among the most extraordinarily talented and hard-working people in our society. We are committed to ensuring that the overall package that they and other public sector workers receive reflects the value that we place on their work. Armed Forces pay rates are recommended by the independent Armed Forces’ Pay Review Body and the Senior Salaries Review Body for the most senior officers. The Armed Forces’ Pay Review Body reported earlier this year that it believes that the 1% increase in base pay recommended for 2017 would broadly maintain pay comparability with the civilian sector. We look forward to their recommendations for 2018-19.
The noble Lords, Lord Tunnicliffe and Lord Bew, referred to morale in the Armed Forces. We recognise that satisfaction with Armed Forces pay has declined since the introduction of pay restraint, although traditionally pay has not been cited as an important factor in influencing decisions either to join or to stay. The remuneration package for service personnel, which includes a good pension, subsidised accommodation and a range of allowances on top of the basic salary, remains, I believe, very competitive.
The noble Lord, Lord Dannatt, expressed his fear that the UK risks becoming militarily irrelevant and referred to the recent comments of General Hodges from the United States. The UK has been a world leader in matters of defence and security for centuries. We will ensure that we retain our long-held military edge by strengthening and modernising our Armed Forces to meet the harder threats that we face today. He also asked about our commitment to the Army. I reassure him that the Strategic Defence and Security Review set out our plans for investment in new Army capability and a modernised war-fighting division, which will enable our Armed Forces to respond to a wider range of more sophisticated potential adversaries and complex real-world challenges. In answer to both the noble Lord and the noble Lord, Lord Tunnicliffe, Joint Force 2025 is being designed to sustain a higher level of concurrency of smaller-scale operations which better reflects the real-world demands in place today. However, at the same time we want to develop the ability to deploy at large scales where this is required. The plan is to be able to deploy at appropriate readiness a force of around 50,000, which includes up to 40,000 from the Army. The restructuring of the Army will offer more choice for policymakers in that context.
I will touch on equipment and procurement. The noble Lord, Lord Owen, referred to the carriers. The carrier-enabled power projection programme will allow the UK to project military power from a floating corner of Britain anywhere in the world for the next 50 years. Aircraft and amphibious forces will be able to launch from the carrier, and represent tremendous value for money given the unprecedented level of flexibility they will offer to the Royal Navy. Are we confident, the noble Lord, Lord Bilimoria, asked, that we can protect the carriers? Yes, we are confident that our new carriers are well protected thanks to the defensive systems we have invested in as part of our equipment plan. I can say to the noble and gallant Lord, Lord Boyce, that, yes, nothing has changed as regards our commitment in the SDSR to a fleet of 19 frigates and destroyers.
I will write on specific procurement questions asked by the noble Lord, Lord Bilimoria, about maritime patrol aircraft, and by the noble Earl, Lord Cork and Orrery, on offshore patrol vessels. My noble friend Lord Sterling pertinently referred to a very important topic, innovation. That is why, in 2016, the Ministry of Defence launched the defence innovation initiative to develop a culture that is innovative by instinct. Innovation is a big challenge for defence. My noble friend mentioned the risk of complacency, and he is absolutely right. We aim to establish a mindset across the department that incentivises our people to think and act more innovatively, and I would be glad to talk to him further about that.
The noble Baroness, Lady Lane-Fox, referred to an extremely important part of our armoury, which is the internet and cyber. I assure her that the Government recognise the importance of the internet as a domain of competition and conflict. The MoD and the National Cyber Security Centre are committed to working closely together and exploiting each other’s expertise and assets. There is more on that topic that I can usefully tell her.
I will write to the right reverend Prelate the Bishop of Coventry about the MoD’s contribution to post-war aftercare, but the key point of that post-war aftercare is overseas aid. Again, I can comment on that topic in a letter, as I will on the CSSF, a topic touched on by the noble Earl, Lord Sandwich.
I am afraid I have received a message to say that I am over time already. I will just ask noble Lords to be patient as the NSCR progresses. We have taken no decisions on this, and any suggestions to the contrary are mistaken. I look forward to further discussion in this House once the review has reached its conclusion.
Lord West of Spithead
Just before the noble Earl sits down, could I ask him to reflect back to the Secretary of State for Defence the general feeling within this House, which was worry about where we stand? We would be very grateful if that could be reflected.