Defence Funding
Debate between Baroness Vere of Norbiton and Baroness Goldie(6 months, 1 week ago)
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Baroness Goldie
To ask His Majesty’s Government whether they intend to replicate the approach of the Green Savings Bonds to provide incremental resource to fund the defence capability by issuing a defence bond.
The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
My Lords, the Prime Minister recently set out our pledge to increase defence spending to 2.5% of GDP by 2030. That increase starts today, will rise each year and will see defence spending rise to £87 billion a year by 2030-31. This is the biggest strengthening of our defence since the Cold War. The commitment will be fully funded, with no increases in borrowing or debt. Therefore, we have no plans to issue defence bonds.
Baroness Goldie (Con)
My Lords, I thank my noble friend for that response. I of course welcome the Prime Minister’s commitment, which is reassuring and provides a clarity that is much needed. My Question is designed to explore innovative ways of augmenting defence spending and thereby assist the Treasury. The Government vigorously promoted green gilts and green investment bonds to fund green expenditure. If that is an acceptable funding principle for the environment, why is it not for our national security?
Baroness Vere of Norbiton (Con)
As I have outlined, the Government will use existing resources to fund this increase in defence spending, but my noble friend makes an important point: our superb defence industry needs investment. Although the Government are the main customer of the defence industry, as are exports, these are of course private companies and they do need investment. There are some reports that defence is being excluded on ESG grounds. The Government have confirmed and are absolutely committed to the fact that investment in good, high-quality, well-run defence companies is compatible with ESG considerations.
Road Pricing
Debate between Baroness Vere of Norbiton and Baroness Goldie(6 months, 4 weeks ago)
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Baroness Vere of Norbiton (Con)
As I said in my opening remarks, the Government have no plans to consider road pricing. I really cannot say more than that.
Baroness Goldie (Con)
My Lords, I find it difficult to fault the analysis of my noble friend Lord Young of Cookham, because he points to an inescapable gap in revenue receipts for the Treasury from fuel duty receipts. I have a difficulty in understanding the Treasury’s opaqueness in responding to this analysis, for which I do not blame my noble friend the Minister. Is that opaqueness attributable to fiscal timidity or dogmatic blindness?
Baroness Vere of Norbiton (Con)
My Lords, it is not opacity. What is going on here is simply that a number of options can be taken forward as taxes shift and change over time. All taxes shift and change over time with regard to the amount of money they bring into the Exchequer. The Government have forecasts as to what will happen to fuel duty and are considering all sorts of ideas as to how that would be plugged. For example, noble Lords will have seen that electric vehicles will start to pay VED from April 2025. It will not be at the same level as for an ICE vehicle, but it is right that EVs start to pay their way.