Lord Coaker (Lab)
My Lords, how will the state of the UK Armed Forces be helped by the cuts to defence spending announced in the Budget? Table 2.1 in the Red Book shows defence resource spending cut from £35 billion in 2023-24 to £32.8 billion in 2024-25, and table 2.2 shows defence capital spending cut from £19.2 billion in 2023-34 to £18.9 billion in 2024-25. How on earth does that defence spending cut help the state of our Armed Forces?
The Minister of State, Ministry of Defence (The Earl of Minto) (Con)
My Lords, I will say something about the Armed Forces to start off with. Our Armed Forces are, at all times, ready to protect and defend the UK. We continue to meet all operational commitments, including supporting Ukraine in the face of Putin’s illegal and unjust invasion and tackling Houthi aggression in the Red Sea. The Royal Navy contributes 25% of NATO’s maritime strength, which has four times as many ships and three times as many submarines as Russia. The RAF has greater lift capacity than at any time since the Second World War. The Army was globally deployed in 67 countries last year, with 14,000 troops deployed on exercises and operations across Europe. We are rightly proud of all their efforts.
On the money side, I have gone into this in quite some detail, and it is the difference between budget and outturn. Budget is a figure struck at the beginning of the financial year, and outturn is what actually gets spent by the end of the financial year. In 2023-24, the budget was £51.4 billion and the outturn was £54.2 billion. This year, the budget is £51.7 billion and the outturn is £55.6 billion—a 1.8% increase of £1.4 billion.
Lord Stirrup (CB)
My Lords, yesterday in another place a Conservative Member suggested to the Minister for Defence Procurement that the timing of the 2.5% target should be determined by the level of threat rather than as economic conditions allow. In response to this entirely rational and pretty obvious proposition, the Minister replied:
“I do not think that we can commit to levels of public expenditure … without being confident that the economy can support them in a prudent fashion”.—[Official Report, Commons, 11/3/24; col. 25.]
Does the Minister really think that giving fiscal considerations priority over the scale and immediacy of the threat to this nation’s security can be characterised as any kind of prudence?
The Earl of Minto (Con)
My Lords, as I have said before, and I can do no more than say again, we are faced with a lot of conflicting needs and requirements from all the different departments of Government. Looking at the level of defence spending, we are spending more in financial terms than we have ever spent before—the highest level in history—and it is increasing in real terms. It is not where we would like it to be, and I think the Prime Minister has made clear the direction of travel in which he wishes it to go.
Lord Lee of Trafford (LD)
My Lords, to say that defence expenditure will be increased to 2.5% “when economic conditions allow”, when Russia and China are massively increasing their defence expenditure and when the world is a tinder-box at the present time, is frankly totally unacceptable and a complete dereliction of national responsibility. How does the Minister react to the recent PAC report that only two of the MoD’s 46 equipment programmes are rated highly likely to be delivered on time, on budget and of high-enough quality? How does the MoD justify employing 60,000 civilians—virtually the same number as over the last five years? What do they all do, when the Army itself is only about 70,000?
The Earl of Minto (Con)
My Lords, there were a lot of questions there. On the question of the contracts, the DE&S is actually overseeing 2,600 different contracts across 550 different programmes, delivering, believe it or not, 98% of key user requirements. It achieves 90% of the strategic milestones and, contrary to public perception, and indeed to perception within this House, it delivers well to budget.
Lord Robathan (Con)
My Lords, my noble friend is making a good fist of defending a frankly indefensible brief. He and I both served together in the Cold War —a long half-century ago—but there is now a hot war in Europe. It is taking place as we speak, hundreds of thousands of people are being killed, and it is against the same opponent. As the noble Lord, Lord Lee, has just said—and I hate to agree with the Liberal Democrats —we cannot say that we will set out our long-term aspiration to increase defence spending “when fiscal and economic circumstances allow”. It is now; we must spend money now before the whole of European prosperity and our prosperity are destroyed.
The Earl of Minto (Con)
My Lords, I can do no more than take that message back, and take the tone of the House back, to the Secretary of State. He will not be surprised, but I will certainly undertake to do that.
Lord Browne of Ladyton (Lab)
My Lords, the Minister will remember that, last year, a senior US general remarked that the British Army was no longer regarded as a top-level fighting force. Some short time thereafter—I cannot remember exactly when it was—at Defence Questions, the then chair of the Defence Select Committee invited the Secretary of State to comment on these remarks as he said they tallied with his committee’s own findings that the conflict in Ukraine had exposed serious shortfalls in the war-fighting capability of the British Army. I have no way of judging whether any of that is correct, but what interested me was the Minister’s response. The Minister, Mr Heappey, responded that
“underinvestment in the Army … has led to the point where the Army is in urgent need of recapitalisation”.
That was the word he used: “recapitalisation”. He went on to say:
“The Chancellor and Prime Minister get that, and there is a Budget coming”.—[Official Report, Commons, 30/1/23; col. 5.]
We have now had two Budgets. There was no recapitalisation in the first. There certainly was no recapitalisation, for the reasons that my noble friend pointed out, in the second. So, when is this recapitalisation going to happen? This, out of the mouths of Ministers, is in direct contrast to the description the Minister gives this House. Why is that?
The Earl of Minto (Con)
My Lords, one can look at the recapitalisation—and I understand it is a very strong word—and the environment we find ourselves in at the moment. Let us think about the orders we have placed at the moment. There are 22 ships and submarines either on order or under construction, and I have seen some of them; we have got 1,200 armoured vehicles on order; we support, in this country, over 400,000 jobs across the union. We spend £25 billion with the UK defence industry, including £5.5 billion on shipbuilding and repair, close to £2 billion on aircraft and spacecraft, and over £2 billion on weapons and ammunition. We continue to support the defence industry and our Armed Forces as best we can. On the absolute amount of money, I completely understand the level of concern.
The Earl of Effingham (Con)
My Lords, the Army, the Navy and the Air Force offer amazing opportunities, but our Armed Forces’ numbers have been shrinking. We saw the largest number of applications to the Royal Navy in eight years during January, but one swallow does not make a summer. We need a proactive, long-term strategy, aside from pay and accommodation, to drive future recruitment. I ask the Minister, what is that strategy?
The Earl of Minto (Con)
My Lords, as I have said before, modern war fighting is as much about capability as numbers. Having said that, much is currently being undertaken to improve and retain force numbers. Between, for instance, June 2021 and June 2022, the Army had 53,000 applications. In the same period last year, we had 69,000 applications. So we are moving in the right direction. We are easing the process of joining, and indeed or rejoining. Pay, conditions, accommodation, childcare—all this sort of stuff—are extremely important. It was in my day and I am sure it is now. We are also introducing a new, single, streamlined recruitment programme which is cross-service and which is about to be awarded this year. We hope it will come into operation by the beginning of 2027. So, I take my noble friend’s point that joining the forces is a great career opportunity and it should always remain so.