Oral Answers to Questions

Debate between Baroness Anderson of Stoke-on-Trent and Mike Penning

Monday 12th December 2016 Commons Chamber

[Mike Penning]

Of course we recognise that bids are coming in. As soon as the Under-Secretary of State for Defence, my hon. Friend the Member for West Worcestershire (Harriett Baldwin), who is responsible for defence procurement, has the ability to make that announcement, I am sure she will do so. We are looking forward to the new frigates, not least because, as I said earlier, we can sell off the Type 23s to countries that particularly want them.

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

Today I received my first Christmas present: a Royal Navy calendar. [Interruption.] A calendar showing platforms, obviously. January features HMS Ocean. Can the Minister inform us how its decommissioning in the next 18 months, after years of impressive service, adds to the strength and power of our Royal Navy?

[Mike Penning]

While procurement does not fall within my bailiwick, I am reliably informed that HMS Ocean was always due to go out of service in 2018, and at the same time the new Elizabeth class carriers will come into force. She has done fantastic work, and we must praise the work the ship and, most importantly, her crew have done over the years, but her time is coming towards its end and she will go in 2018.

Defence Expenditure

Debate between Baroness Anderson of Stoke-on-Trent and Mike Penning

Thursday 27th October 2016 Westminster Hall

[Ruth Smeeth (Stoke-on-Trent North) (Lab)]

It is a pleasure to speak under your chairmanship, Mr Bone. It is always a challenge to follow my informed colleagues in these debates, so I apologise for any repetition.

The first duty of any Government is the defence of the realm and security of their citizens, so I welcome this opportunity to discuss the Government’s ongoing defence commitments. We are living through a period of global turmoil and national uncertainty. Though Britain is preparing to exit the European Union, we must remain an outward-looking nation, committed to fulfilling our role in the world and supporting the efforts for peace and international stability across the globe.

The threats to that peace are many and varied: an emboldened Russian Federation, continuing instability in the middle east, a Europe struggling to come to terms with the historic migrant crisis, ever-adapting terror networks, and modern technology that expands the potential threats to our country and that has revolutionised the theatre of war. In these uncertain times, it is more important than ever that the UK is committed to maintaining a military that is capable of dealing with whatever threats the future may hold and that meets the capacity and capability needs identified by the strategic defence and security review. That can be achieved only by ensuring sufficient year-on-year funding to maintain and expand our armed forces capability. That is why I and my colleagues on the Defence Committee welcome the Government’s continued commitment to the 2% pledge on defence spending, to ensure our NATO compliance. That commitment sends an important message to our allies in NATO and beyond that the UK remains committed to fulfilling our role in the world, and to defending and supporting our friends, wherever and whenever that need arises.

As we have heard, the UK has the largest defence budget in the EU, the second largest in NATO and the fifth largest in the world, but money alone will not solve these issues. I hope that the 2% pledge is a commitment to maintaining our military strength in the long term. It is important that we do not simply take the figure of 2% as an arbitrary one or as the final word on Britain’s spending and procurement in the years ahead. In charting the future of the UK’s military capacity, we must always endeavour to work from first principles. What is required to keep our country safe?

In our Committee’s report, we raised a number of initial points in response to the Government’s spending plans. We noted that while the Government met their 2% commitment to defence spending last year, they did so with the aid of what appeared to be a measure of creative accounting, albeit creative accounting that was accepted by NATO, as was outlined by the Chair of the Committee, the right hon. Member for New Forest East (Dr Lewis). By revising the criteria by which defence expenditure is calculated, the predicted Government spend for 2015-16 rises from £36.8 billion, or 1.97% of GDP, to £39 billion, equivalent to 2.08%. That was achieved by including expenditure from other funds, such as the conflict, stability and security fund, which is controlled jointly by the MOD and the Department for International Development.

I have no doubt that the Government’s commitment to defence spending and recognition of the challenges our country faces is sincere. However, our troops deserve more than financial wizardry. I hope that, in future years, the Government work to ensure that the necessary resources are put into defence, and ensure that we are spending a minimum of 2% annually in real terms, so that we have sufficient resources to fund our capabilities as well as to invest in our future.

I also welcome the Government’s commitment to maintaining the size of our armed forces, with plans to grow the size of the Royal Navy to 30,600 in 2025—an increase of 400 personnel and an uplift of 1,600 over the position initially laid out by the previous Government in 2010. However, as we have discussed today, with the planned retirement of HMS Ocean, even those numbers are insufficient to fully man our current capabilities. I have significant concerns about proposed cuts to our Royal Marines in terms of absolute numbers, which I hope our Committee will continue to investigate.

Considering the ongoing active deployments of our RAF forces, plans to expand the strength of RAF regular personnel to a baseline of 31,750 are welcome. However, with the imminent arrival of not enough F-35s, we will have to review that number. I remain sceptical of the Government’s suggestion that an integrated Army of 112,000 personnel is sufficient to deliver the Army’s contribution to joint force 2025, but time will tell, and I am sure we will revisit that.

There is much in the Government’s response to our report that is welcome, but I wish to stress the importance of ensuring that capacity is met and that our defence spending is sufficient to meet our needs, even when that may necessitate a spending increase over and above the 2%, which, despite what the hon. Member for North Wiltshire (Mr Gray) said, many Members on the Labour Benches would support. We must understand that the 2% pledge represents a minimum annual spend, and we should never seek to curtail or compromise our military capacity in order to stay within that amount. Our report stated that

“the Government must be clear that 2% is a minimum—not a target—and be prepared to increase defence expenditure further, in order to reflect the increasing threats faced by both the UK and our Allies.”

We must also take into account the UK’s situation in the wake of the EU referendum and the role that the current uncertainty may play in our economic outlook. With the additional financial and geopolitical challenges that Brexit may pose in the short to medium term, it is vital that the Government recognise those concerns and act to ensure that our military remains on solid financial and operational ground in the years ahead. A report from the Resolution Foundation suggested that the economic upheaval thrown up by uncertainty around Brexit could cost the UK economy up to £84 billion over the next five years, which would have a significant impact on the 2%. The real value of the Government’s 2% pledge ebbs and flows with the country’s economic fortunes. As outlined by the hon. Member for North Wiltshire, the commensurate drop in GDP resulting from that would be reflected in a drop in the value of the 2% set aside for annual defence expenditure, which could have a devastating effect on our capability, especially if the 2% comes to be seen as a spending cap rather than a minimum.

A further concern is the declining value of sterling and the impact that it may have on overseas procurement. One particular issue is the purchase of military equipment bought in US dollars, at prices that could greatly exceed initial estimates. For instance, the MOD recently announced the purchase of nine P-8A Poseidon maritime patrol aircraft from Boeing via a foreign military sale. The predicted cost, including training, infrastructure and the necessary support at RAF Lossiemouth, was recently estimated to be £3 billion over the next decade. However, with the pound slumping to its lowest value against the dollar in some time, the initial costs of purchase could greatly exceed initial predictions unless appropriate—

[The Minister for the Armed Forces (Mike Penning)]

I apologise for interrupting, but as former Ministers in the room and the Chair of the Defence Committee will know, these sorts of contract are offset, and predictions are put in—the Treasury has that capability. If we build a road project, we put in the project cost and the inflation cost. That risk is built into the project, which former Ministers in the Chamber know.

[Ruth Smeeth]

I thank the Minister for that. The end of my sentence was, “unless appropriate hedging is put in the contract.”

[Mike Penning]

It always is.

[Ruth Smeeth]

While I appreciate that it probably is, I do not think anyone could have anticipated the likely devaluation of the pound in recent days. I hope very much that that is the case, but we will see what happens in the long term when we get the full figures.

Oral Answers to Questions

Debate between Baroness Anderson of Stoke-on-Trent and Mike Penning

Monday 16th November 2015 Commons Chamber

[The Minister for Policing, Crime and Criminal Justice (Mike Penning)]

I made a statement to this House last Monday, and since then, as Members can imagine, I have had lots of good working relationships with police and crime commissioners. Frontline policing is a matter for frontline police, chief constables and their PCCs; it is not a matter for Ministers to interfere with.

[Ruth Smeeth]

I thank the Minister for that answer, but the issue of frontline policing relates to the budget awarded to each police and crime commissioner. Staffordshire has already lost 447 warranted police officers since 2010 and we are looking at losing a further 300 under the current funding settlement. Given the importance of policing to the Prevent agenda—it provides a vital resource for Prevent—can you assure me that you will work with police and crime commissioners to review the budget?

[Mike Penning]

I am not sure that Mr Speaker is going to be reviewing the budget, but I certainly will be looking very carefully at it. The number of frontline police officers in the hon. Lady’s constituency is up in percentage terms compared with what was there before, and crime is massively down. No one knows what the budget will be, because I have not announced it yet.