Armed Forces Personnel: School Fees

Baroness Goldie Excerpts

Wednesday 5th February 2025 Lords Chamber

Asked by

[Baroness Goldie]

To ask His Majesty’s Government what engagement they have had with armed forces personnel whose children are currently educated at fee-paying schools to ascertain the impact on such families of imposing value added tax on school fees.

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, the Ministry of Defence is continuing to monitor the impact of the Government’s change to VAT rules for private schools on service personnel who claim the continuity of education allowance. The Ministry of Defence recalculated CEA rates based on the new fees published by schools for January 2025, and this increased the income tax-free amounts available to claimants.

[Baroness Goldie (Con)]

I thank the noble Lord. I am aware that the continuity of education allowance has been uprated, but that still leaves a parental contribution. What we do not know is by how much the parental contribution will increase as a consequence of VAT on school fees. Indeed, even the combined talents of Sherlock Holmes and Einstein would fail to penetrate MoD methodology on this issue. We know that Armed Forces personnel will have to pay more in school fees. Can the Minister answer a simple question? How much more will they be paying?

[Lord Coaker (Lab)]

I thank the noble Baroness for her question. I will always check the figures and, indeed, check hers, as she will know. She will also know that the allowance contributes towards the cost of boarding school education, with the MoD paying a fixed rate of up to 92% of fees for children attending state-maintained schools and up to 90% of fees for those attending independent schools. I would say to her that, in essence, this is exactly the same policy as the previous Government had.

Fiscal Policy: Defence Spending

Baroness Goldie Excerpts

Monday 3rd February 2025 Lords Chamber

[Baroness Goldie (Con)]

My Lords, last week I raised my profound concerns about the funding fog surrounding defence. Specifically on the Government’s fiscal policy, I want to ask the Minister the following questions. First, given the recent gloomy projection by the CBI on job losses, what discussions have the Government had with major defence suppliers to assess the impact of the NIC increase on their workforce? Secondly, if the Government really value our Armed Forces personnel, why are they landing families with the full impact of VAT on private school fees, when the continuity of education allowance will meet only part of that increase—and yet they are prepared to exempt United States armed forces personnel in this country from paying VAT on private school fees?

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

I thank the noble Baroness for her important questions. We are working closely with NATO in developing industrial capability. In particular, we are looking at how we develop interoperability between NATO partners—which, as the noble Baroness will know from her work, is an important consideration—to give us the capabilities we need.

The noble Baroness will know that the Government have increased the continuity of education allowance to meet 90% of the cost of school fees, which is line with the consistent use of that policy to meet school fees. On the US military exemption, the VAT rule applies to all businesses supplying services to US forces, so there has been no change in that regard.

Major Defence Contracts

Baroness Goldie Excerpts

Monday 3rd February 2025 Lords Chamber

[Lord Coaker (Lab)]

We are supporting the SME sector by spending billions of pounds on defence. The noble Baroness makes an important point about the importance of small and medium-sized industries. We often talk about the primes—the really big companies— but they are often supported by small and medium-sized businesses, which are extremely important, along with ensuring we get investment across the country.

I will tell noble Lords the other thing that needs to be done. For decades in this country we have had a shortage of skilled workers and skilled apprenticeships, and certainly small and medium-sized businesses need help to recruit the skilled labour they need to deliver the products that they have on offer.

The final point I will make is that, clearly, we are now in a period of transition from pre Ukraine to post Ukraine. That obviously results in looking at who we are buying from and the sorts of things we are purchasing, and the defence review will deal with some of that as well.

[Baroness Goldie (Con)]

My Lords, further to the point raised by the noble and gallant Lord, Lord Stirrup, it is the case that our defence industry sector has never been in greater need of the skills and talents of our brightest students, and the Minister failed to address the point specifically raised by the noble and gallant Lord. This House wants to know what are the Government doing to address the unacceptable intolerance whereby companies are hounded off campuses and barred entry to careers fairs? In particular, what are the Government doing to ensure that this obstruction to the supply of talent to the defence industry sector is removed?

[Lord Coaker (Lab)]

I am sorry if I did not answer the point raised by the noble and gallant Lord. The point the noble Baroness makes is extremely important, and she asks what the Government have done about it. The Secretary of State for Defence, and I think the Business Secretary, wrote to the universities concerned and asked them to ensure that obstructive factions within the student unions in their universities did not prevent the legitimate recruitment, with respect to the RAF, and the legitimate activities of defence companies as well to try to recruit. It is extremely important for all universities to understand that of course we accept the right of students to protest, and all the rights and freedoms that come under a democracy—that is what we are standing for in many of the conflicts in which we are involved across the world. But with that comes the universities’ responsibility to do what they can to ensure that people pursuing legitimate activities—which will help the defence and security of our nation and our allies—are protected, and this Government will do all they can to ensure that they are.

Russian Maritime Activity and UK Response

Baroness Goldie Excerpts

Tuesday 28th January 2025 Lords Chamber

[Baroness Goldie (Con)]

My Lords, Russian maritime activity has increasingly been a matter of concern, and I thank the Secretary of State for Defence for his timely update on the UK response, through the agency of the Minister, the noble Lord, Lord Coaker. Equally welcome is the candour that has been deployed. It is important for Parliament to understand what the response is, but the detail that the Secretary of State has been willing to disclose is unexpected and certainly helpful and reassuring. It sends a clear message to President Putin that we know what he is up to, and his covert and menacing activity is being closely monitored, with an appropriate Royal Navy intervention.

These Benches support the Government’s response to this brazen maritime activity. We commend the Secretary of State on changing the Royal Navy’s rules of engagement, and his robust attitude towards this provocative intrusion by a Russian spy ship deserves praise.

It is clear from the Statement that the Government are also cognisant of the wider Russian threat and helpfully lists both the RAF and Royal Fleet Auxiliary response, together with our contribution to NATO and JEF activity. All of that has the support of these Benches, as does the Government’s continuing support for Ukraine. But all of this comes at a cost, and if our UK defence capability is to continue to operate at a level necessary to meet these continuing threats, we have to know how the Government intend to resource that new level of response.

In anticipating the reference of the noble Lord, Lord Coaker, to the SDR report, which we are led to believe is expected in March, I gently remind him that by then the Government will have put defence funding into the deep freeze for nine months. Given the news stories now swirling around, with the financial challenges hitting the Chancellor head on, is 2.5% of GDP for defence by 2030, regardless of what the SDR comes up with, off the agenda?

Given President Trump’s very robust approach to defence spend, believing 5% to be necessary, what are the repercussions for the special relationship if the UK fails to make 2.5% by 2030? In particular, what are the implications for our mutual defence engagement?

Against this backdrop of defence funding fog, what types of MoD orders are currently in limbo? What preparations are in hand to adapt to the new and harsh reality of cutting our defence coat according to the Government’s visibly reduced and increasingly threadbare cloth?

In conclusion, there is a patent irony that the Chancellor can find £9 billion to hand over to Mauritius, thereby reducing our national security, while slapping inheritance tax on to our Armed Forces personnel, who fight for our security, and at the same time exempting US armed forces personnel from paying VAT on private school fees in this country while clobbering our own Armed Forces with VAT on school fees.

Will the Minister, who I know is a champion of defence and the Armed Forces, convey to the Chancellor, in his own unvarnished language, which I know he is more than capable of using, how illogical, how unfair and how unacceptable this is?

[Baroness Smith of Newnham (LD)]

My Lords, from these Benches, I associate myself with the first remarks of the noble Baroness, Lady Goldie, in supporting His Majesty’s Government in their response to the Russian ship, and thanking the Minister for being here today to answer questions, as well as the Secretary of State for his Statement last week. It is clearly important that parliamentarians have the opportunity to understand what is happening: equally, we understand the Secretary of State’s point that there is a limit to how much operational information can be given.

We support the Government’s action, but I have a series of questions. The Minister will probably be quite relieved that, for once, they relate not to defence expenditure but to defence posture and practice. We are looking in our own waters at the North Atlantic area —the Euro Atlantic area—which is the most important for our security. We are, in many ways, benefiting from the fact that NATO has two new members, Sweden and Finland. They are both committed to serious defence and Finland, in particular, is committed to national resilience. At the end of the Secretary of State’s Statement is a point about securing the UK’s borders and our own security. What are His Majesty’s Government doing in terms of United Kingdom resilience? Are we considering giving further information to ordinary civilians about the security concerns that we are aware of but perhaps they are not thinking about?

That is not necessarily to go as far on civilian training as Finland does—I am certainly not calling for conscription—but are we at least thinking about widening the discussion with society to include the threats in not just traditional hard military concerns but cyber? Are we thinking about the need for us all to be vigilant and to be aware that we need to think about the threats coming from Russia as a whole society? At the moment, there is a reluctance to understand that we need to devote more time and resource to defence. This is a plea not for a percentage of defence expenditure but about the need to talk to citizens about the threats we all face.

There have been clear threats in our waters, but we have also seen threats in recent days in the Baltic states and a potential threat to Danish and Greenlandic sovereignty. To what extent are His Majesty’s Government willing and able to speak truth to power, in the form of the President of the United States? The idea that the United States somehow requires a sovereign territory for its own security is wholly unacceptable. For it essentially to threaten the sovereignty of a fellow NATO member state is also unconscionable. While I do not expect the Minister to tell us what the Prime Minister and the President spoke about recently, will he at least suggest to the Secretary of State, the Foreign Secretary and the Prime Minister that we need to ensure that NATO is fit for purpose and that the whole edifice is not in danger of coming down? After all, NATO has kept us secure for over 70 years.

Undersea Internet Cables

Baroness Goldie Excerpts

Thursday 16th January 2025 Lords Chamber

[Lord Mountevans (CB)]

My Lords—

[Baroness Goldie (Con)]

My Lords, the principal response to this threat in the Baltic is coming from NATO. May I press the Minister a little further on the contribution that United Kingdom naval assets are making to that endeavour? In particular, the planned multi-role support ship was always intended to be an important contributor to that. May I ask for a report on progress on that important new addition to the fleet?

[Lord Coaker (Lab)]

If I understand the noble Baroness rightly and she is talking about the provision of a second additional ship to support and augment the ship “Proteus”, that will be part of the defence review. On the other assets that she talks about with respect to the Baltic, she will know that in December 2023, under the previous Government, a huge maritime collection of ships across NATO and JEF was sent to the Baltic, including UK maritime assets and UK surveillance aircraft. There was a further initiative in June 2024, again under the previous Government, and just recently we have had the announcement of Operation Nordic Warden, as I have said. All the way along, there have been significant UK contributions.

Another thing that is important, since we are often questioned about this, is that it is not only the contribution that we make in terms of our assets but the thought leadership, co-ordinating power and other leadership potential that the UK provides. Let us remember that it was in 2014, under the previous Government, that JEF was set up under UK leadership. It has worked particularly well. We should sometimes recognise what this country contributes to the defence of the world as well as some the challenges that face us.

Air Defence Capabilities

Baroness Goldie Excerpts

Thursday 9th January 2025 Lords Chamber

Asked by

[Baroness Goldie]

To ask His Majesty’s Government what progress has been made in the technological advancement and modernisation of the United Kingdom’s air defence capabilities.

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, the UK continuously reviews our integrated air and missile defence requirements to ensure that we are adequately defended against the evolving threats that we face. We are investing in new technologies, including the DragonFire directed energy weapon, to defeat threats such as drones, and enhancing our capabilities through the T45’s ability to defend against anti-ship ballistic missiles. Further development in IAMD capability is being considered in conjunction with the strategic defence review to ensure a coherent approach across defence and wider government.

[Baroness Goldie (Con)]

I thank the Minister for his response. Recent very public concerns about our air defence capabilities have been amplified by our European and NATO partners. The urgency of the situation is highlighted by the experience of Ukraine. Government entreaties to await the SDR report simply do not cut it. Reassurance is needed now, but I accept that the picture is complicated so will the Minister write to me with a stocktake of the current situation and details of the modernisation proposals, whatever they are, and then we can place that letter in the Library?

[Lord Coaker (Lab)]

I thank the noble Baroness for raising the incredibly important subject of air defence. She is quite right to point out the impact on Ukraine; 12,000 missiles have been fired at Ukraine by Russia, showing the importance of air defence now. It has been raised in report after report. I will of course write to her and put a copy in the Library, as a current stocktake of where we are, but we are already taking action. We are seeing the development of ORCUS and anti-drone technology to protect airfields; the enhancement of Sea Viper, which is the T45 missile that allows us to defend against ballistic missiles; and developments such as the DIAMOND initiative, which is bringing European countries together to get a ground-based air missile defence system. A number of initiatives are already being taken, but I agree with the noble Baroness. I will write to her so that we have a stocktake of that and so that the information is available to all Members of this House.

Defence: 2.5% GDP Spending Commitment

Baroness Goldie Excerpts

Tuesday 17th December 2024 Lords Chamber

Asked by

[Baroness Goldie]

To ask His Majesty’s Government, further to the remarks by Lord Coaker on 14 November (HL Deb col 1927), whether they are planning the fiscal event next spring which is to set the pathway to spending 2.5 per cent of gross domestic product on defence to take place before they publish the Strategic Defence Review.

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, we remain committed to setting out a road map for defence spending to reach 2.5% of GDP. The strategic defence review is expected to complete next spring. We will set out the pathway to spending 2.5% at a future fiscal event.

[Baroness Goldie (Con)]

I thank the noble Lord, and certainly, we have previously been told that the SDR will spell out what defence needs and that a spring fiscal event will confirm how and when we are going to pay for it. In a Written Statement yesterday, the Chancellor implied that there will not now be a spring fiscal event. Apparently, the OBR will publish in March an economic and fiscal forecast, to which the Chancellor will respond with a parliamentary Statement. This does not seem to be the same as a spending review. We need to cut through this fog of confusion. May I ask the Minister—I am very happy if he wants to double-check the position with the Treasury—will the forecast and parliamentary Statement to which I referred clarify when the 2.5% of GDP spend on defence will apply? If not, what will clarify it, and when?

Drones: RAF Bases

Baroness Goldie Excerpts

Wednesday 27th November 2024 Lords Chamber

[Lord Coaker (Lab)]

I thank my noble friend for the question. We are working with our international partners, including the United States. Of course, we are trying to ensure that we have all the equipment that is needed to tackle any of these attacks that we face. Similarly, with respect to the aircraft carrier, I can say that a civilian drone was observed in the vicinity of HMS “Queen Elizabeth” on 22 November, but it got no closer than 250 metres. I can reassure my noble friend that we take all of this seriously, and we will work closely to ensure the safety of all our sites.

[Baroness Goldie (Con)]

My Lords, I am aware that there is a series of very effective assets which can be deployed to air defence. I do not expect the Minister to comment further on those, but I will ask him, specifically, how the ground-based air defence system is progressing.

[Lord Coaker (Lab)]

That is obviously a matter of real importance, and the defence review is looking at what we should do with respect to air defence in the round, including defence of the homeland, as the noble Baroness asks.

Defence Programmes Developments

Baroness Goldie Excerpts

Monday 25th November 2024 Lords Chamber

[Baroness Goldie (Con)]

My Lords, I pay tribute to the marvellous men and women in our Armed Forces, and the civilian cohort who support defence in such an extraordinary manner and help to keep our country safe. Sometimes, in our political badinage, we are inclined to forget that. I know that noble Lords entirely support what defence is doing in our name and for us. I also pay tribute to the Government’s clear resolve to continue supporting Ukraine. I know, again, that this enjoys universal support in the House.

Prompted by the Statement, there are so many questions that I could ask that I am going to try to keep this simple. Looking at the recent antics of the Government, you might think that the pantomime season had arrived early: an embattled Prime Minister and his Chancellor telling business and farmers, “We’re on your side”, to be met with a chorus of, “Oh no you’re not”; an isolated Secretary State for Defra being told, “Look behind you” as the Prime Minister and his Chancellor hover above British farmers with a guillotine.

On defence, the Government’s approach is clearly predicated on the premise that ignorance is bliss. Defence spend will rise to 2.5% of GDP, but we do not know when. Will that decision, when it is known, inform the strategic defence review? We do not know. Will the strategic defence review inform the fiscal imperative of pinning down a date for 2.5% of GDP? We do not know. What impact is the imposition of VAT on school fees going to have on our Armed Forces? We do not know. Is it going to impact on recruitment? We do not know.

What do we know? We know that any significant question asked of the Government about capability—GCAP, the progress of AUKUS, the development of drones—is met with, “Wait for the strategic defence review report next year”. That response might be disappointing to inquisitive nuisances like me but, in fairness, it is a sustainable position if consistently adhered to by the Government—but it is not, because without awaiting any SDR outcome, the Defence Secretary announced in the other place last week that we are scrapping ships, including HMS “Albion” and HMS “Bulwark”, and helicopters. Given the Government’s steadfast fallback on the SDR to explain their reluctance to talk about anything, this is an odd aberration.

Let me explain, however, what makes it even odder. Earlier this year Luke Pollard, now the Armed Forces Minister, said that HMS “Albion” and HMS “Bulwark”,

“play a key role in the Royal Navy’s ability to project power and deploy Royal Marines at scale”.

He even criticised the Conservatives for not ruling out the mothballing of the two amphibious assault ships, which he said in January

“are important for the Royal Navy and should be retained”.

He also said on Twitter in January—this has been reported to me, because I have nothing to do with Twitter—that:

“Mothballing HMS Albion and HMS Bulwark when they still have a decade of planned active service ahead is bad for Plymouth and bad for the Royal Navy”.


I put the following questions to the Minister—or should that be Prince Charming? He is certainly one of the more acceptable faces of the Government. If his honourable colleague Mr Pollard was so right in January, how is he so wrong now? If, as he identified, these ships are a classic illustration of a capability that is not going to be used every day but must be held in readiness, to what extent is the operational mobility of the Marines compromised by this decision? Does the Minister anticipate, ahead of the strategic defence review report, more precipitate announcements about assets being scrapped and decommissioned? Lastly and in particular, will he reassure the House that there are no plans to mothball either of the carriers?

[Baroness Smith of Newnham (LD)]

My Lords, I do not plan to engage in any pantomime discussions, which we are getting perhaps because we are slightly close to Christmas, because it is important that we remember the significance of defence. Something that is appreciated, not just in your Lordships’ House and the other place but by our Armed Forces, is the extent to which the political parties are united in the tributes that we pay to them, and the fact that we recognise their commitment to our country. We also owe them a duty to ensure that defence expenditure means that the equipment for our Armed Forces is the best appropriate and that we are putting the right resources into defence.

We have a strategic defence review where we understand that there is a cap. As the noble Baroness, Lady Goldie, said, we do not know at this point when the 2.5% is going to be introduced, so that is an uncertainty. We welcome the fact that the Secretary of State brought forward a Statement on defence programmes and that the Minister is in his place today to answer questions on it, because a lot of questions that require further probing.

The Statement from the Secretary of State seemed to suggest that the answer to a lot of the questions from the noble Baroness, Lady Goldie, is, “We didn’t know the state of either the Budget or our Armed Forces when we took office”, and that is why the issues about decommissioning are being brought forward now. Could the Minister say whether the decommissioning of equipment is being done now because the Secretary of State has discovered that the time has come and in fact it would cost more to keep these ships and other pieces of kit operational? How much is the decommissioning going to cost? Has that been taken into consideration? Are the further pieces of equipment part of an ongoing review programme? It is important for us to understand what the Secretary of State and the chiefs are actually looking at.

Beyond that, what scope is there for the Secretary of State, and the Minister of State in your Lordships’ House, to tell us what is planned for defence procurement? In the Statement, the Secretary of State made the repeated point that the Treasury has understood the importance of defence for growth. We agree, yet the Budget increased expenses for the defence industry, like every other business, because of employers’ national insurance. The Minister has reassured me, both in Grand Committee and in private discussion, that the national insurance increase will not impact on the cost of the Armed Forces. We accept that, and it is very welcome. However, presumably the defence industrial base will pay the increased national insurance costs. While the primes might be able to take that as relatively small change, is that true of the sub-primes? What impact will it have on the small and medium-sized enterprises so vital for the defence industry?

I turn to something that could be either a vicious circle or a virtuous circle. If defence is indeed able to contribute to the growth of UK plc and we see our economy grow, that will, by definition, also help with defence expenditure if the 2.5% is part of a growing GDP. But if the defence sector and the economy as a whole go into decline—and there have been suggestions that the Budget might lead to a decline in our national GDP—what impact is that going to have on our defence expenditure? These are some clear questions that we need to understand. They are not intended to be unhelpful, but simply to ask whether we are really giving the support needed to the defence industrial base.

Finally, one of the things we heard across the Chamber in discussions about the G20 and COP summits was the importance of internationalism. The Secretary of State mentioned the Trinity House agreement on British-German defence co-operation. What are we expecting in terms of a Lancaster House refresh? Also, what is His Majesty’s Government’s assessment of the reports in today’s Financial Times that France has begun to step back from its attempts to veto non-EU countries such as the UK being part of the European defence investment programme? That, presumably, will assist the UK in strengthening our defence relations not just with France but with the European Union.

Defence: 2.5% GDP Spending Commitment

Baroness Goldie Excerpts

Thursday 14th November 2024 Lords Chamber

[Baroness Goldie (Con)]

My Lords, the Prime Minister and the Chancellor’s continuing dithering on when the Government will spend 2.5% of GDP on defence has caused stasis in the MoD, which does not know what it can spend and when, a stagnation of the order book and disgruntled industry partners. What orders are currently being withheld, what is their value and to what extent are other customers overtaking the United Kingdom in the queue for supplies?

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

I do not agree with that caricature of what is happening. The Chief Secretary to the Treasury said at the weekend, and it has been repeated since, that we will reach 2.5% at a future fiscal event in the spring. The defence review is looking at what capabilities we need and we will then set that in the context of the 2.5% as we move forward. That sequencing is the proper way for us to go ahead. As it stands, no major projects are being disrupted as a result of the review.