Ministry of Defence

Lord Spellar Excerpts

Monday 26th February 2018 Commons Chamber

[Sir Edward Leigh]

That is a very good point. With France, and after America, we are the leading military power in Europe and we have to set an example. If we withdraw from exercises, that creates a bad impression.

I am glad to see that the hon. Member for Gedling (Vernon Coaker) is here. He introduced his Backbench Business debate on defence last month and pointed out that the risks this country faces are only intensifying. If we face a multiplicity and variety of threats, surely our capabilities must reflect that. Russia is indeed a threat again, because it realised that the only way to be taken seriously is to be seen to be a threat. We treated Russia with contempt during the 1990s and it has drawn the lesson. It is a geopolitical gamble that we may not approve of, but in terms of Russian influence it has paid off. What have we been talking about for the past hour except Russia? According to some estimates, its economy’s GDP is equivalent to that of Italy or even that of Australia. Russia’s emphasis on its defence spending has made it an extremely important geopolitical player. Although we are constantly told that times have changed and that defence spending is not as important as it was, perhaps the Russian example shows that defence spending does pay off. I am not for one moment defending or approving of Russia or anything it does, but it has drawn the obvious lessons from the 1990s. There is a threat from Russia and we need to take it seriously.

Surely one lesson we can draw from the past, particularly from the lead-up to the second world war, is that, in terms of commitments, we must have a real presence. There is no point in our having a token commitment to or presence in the Baltic states; we need a real presence if deterrence is to work.

Many other threats are developing from Russia, the Chinese and other potential opponents: cyber-attacks and information warfare are all potential threats.

[John Spellar (Warley) (Lab)]

The hon. Gentleman rightly identifies the potential difficulties on the north European plain. Should not the Ministry of Defence therefore reconsider its decision to withdraw from north Germany and reinstate our capability there?

--- Later in debate ---

[Dr Lewis]

I will not defend what happened in 2010. I was a shadow Defence Minister for slightly longer than the duration of the second world war in the years up to 2010, and I was told retrospectively that the reason I never became a real Defence Minister was that it was known that I would not go along with what they were planning to do. So I am not inclined to lay down my life for the Cameron-Lib Dem coalition of those years. I did not do it then, and I will not do it now.

Having said that, it is all part of a bigger trend, and I come back to my projection of the situation. At the end of the cold war, as we have heard, we took the peace dividend. We had the reductions, which were reasonable under the circumstances. But in 1995-96—the middle of the 1990s and several years after we had taken the peace dividend reductions—we were not spending barely 2% of GDP on defence as we do now, but we were spending fully 3% of GDP on defence. From then on it was downhill all the way—

[John Spellar]

Will the right hon. Gentleman give way?

[Dr Lewis]

I will give way to my good friend the deputy Chairman of the Committee in a moment.

I can remember Tony Blair on HMS Albion in 2007, looking back on his 10 years as Prime Minister and saying, “Well, I think we can say that we have kept defence spending roughly constant at 2.5% of GDP if the cost of operations in Afghanistan and Iraq are included.” But in fact the cost of operations should not have been included, because they are meant to be met from the Treasury reserve. The real figure over the Blair decade came down to 2.1% or 2.2% of GDP.

[John Spellar]

It is clear from the figures provided by the Library that while in most years there was an actual increase in defence expenditure during the years of that Labour Government, since 2010 it has been -1.4%, -1.4%, -4%, -3.3%, -2.4% and -2.9%, and in 2016-17 it did actually go into the positive, +1.4%. My friend should be clear that there was a step-change when the Cameron Government came in that led to year-on-year cuts, and our armed forces are feeling the effect of that.

[Dr Lewis]

What I am looking for today is agreement across the House that we recognise that we should not be having almost theological debates about whether we are just above or just below the 2% minimum guideline that NATO prescribes to its member states for defence expenditure, but that we have to get back to the level—at the very least—of what we considered appropriate for so long, right up until the mid-1990s, when the Labour Government came in, which was 3% of GDP.

--- Later in debate ---

[Mr Ellwood]

I am pleased the Defence Secretary is in his place, because this is very much of concern to him, as it is to all of us in the House, and it gets raised regularly. The last time he was in Brussels he raised it, and our allies in the United States are concerned about it too. The hon. Gentleman raises a very important point. Let us be honest: we know that, for varying reasons, the financial year has been tough. We are grateful to the Treasury for recognising the fiscal pressures the MOD is under and providing an extra £200 million window to allow us to close the books on the financial year 2017-18. I make it clear that this is new money; it is different from the £300 million that has been brought forward to assist with the continuous at-sea deterrence programme.

Looking ahead, there continues to be a lot of debate, as has been expressed today, about the pressures on and size of the armed forces, their annual budget and the 10-year spending plan. I thought it would be helpful to place things into context following the defence and security capability review and the defence modernisation programme, and to flag up some realities that are not for this budget, but which are coming around the corner. The Defence Secretary has spoken of the need to look at outputs, rather than inputs. We must not just set out the number of tanks, ships or personnel that we need; we must first ask ourselves what we actually want to achieve. That leads us to determine the size of our armed forces and the defence posture we wish to show. This should reflect our duties, both domestic and overseas; our ambitions as a force for good; and our international responsibilities as a permanent member of the UN Security Council and lead member of NATO.

We also need to adapt to the changing circumstances, as the threats we face become complex and intertwined. We must recognise that the world has become more dangerous since the publication of the 2015 SDSR. The risks and threats we face are intensifying and diversifying faster than expected, hence the purpose of the defence modernisation programme. It will allow more time to carefully consider how defence works, as well as what defence needs; it will aim to improve how defence operates; and it will focus on achievable efficiency and create different arrangements with suppliers. This modernisation will allow us to take the necessary long-term decisions about our military capability.

For clarity, let me say that the defence modernisation programme consists of four workstreams: the delivery of a robust MOD operating model, creating a leaner and more efficient MOD; a clear plan for efficiencies and business modernisation; a study of how we improve our commercial and industrial strategy, building on, for example, the shipbuilding strategy and the recently announced combat air strategy; and a focus on our defence policy outputs and our military capability—arguably the most important of the four.

[John Spellar]

That is all well and good, and all long term. Given that, why are the Government not sorting out the Capita contract on recruitment, which is clearly, visibly, obviously and lamentably failing the country, our armed forces and the recruits?

[Mr Ellwood]

The right hon. Gentleman touches on something that I am not going to disagree with, but it is pertinent to and included in the workstreams I have just mentioned; we will be seeking more efficiencies and business modernisation. That means looking at our relationship with the contractors we work with, in order to improve the service we need to provide for our service personnel.

The work I have described will be led by the MOD, working closely with the National Security Secretariat and the Treasury, and engaging widely with Parliament, think-tanks, academics, defence experts, international allies, the media, devolved Administrations, the defence industry and, of course, the public.

[John Spellar]

Having all of those other worthy people involved does not get to grips with the problem of the here and now; it is pushing everything off to the right and over the horizon—again. Why will the Department not get a grip of just this programme and sort it out, because it is crippling to our armed forces?

[Mr Ellwood]

We have a programme—it is not fiscally neutral, as the last study was. This will allow us to make the changes and the recommendations that we need to take forward. I hope that the right hon. Gentleman will be able to get behind that, in order to make sure we can provide the service and the changes that we need to make, and which our armed forces deserve.