Defence Expenditure

Debate between Julian Lewis and James Gray

Thursday 27th October 2016 Westminster Hall

[Dr Julian Lewis (New Forest East) (Con)]

I beg to move,

That this House has considered the Second Report from the Defence Committee of Session 2015-16, Shifting the goalposts? Defence expenditure and the 2% pledge, HC 494, and the Government response, HC 465.

It is a privilege to present the findings of our report entitled “Shifting the goalposts? Defence expenditure and the 2% pledge” to the public once again—it was published some time ago. I doubt whether anybody two or three years ago would have registered the significance of the term “2% of GDP” in connection with defence, because it was only relatively recently that the prospect of Britain’s falling below the NATO recommended minimum expenditure on defence for the first time came to the public’s attention. For many years, we spent a great deal of money on defence. The purpose of the report is to track the history of that expenditure to check the extent to which we are continuing to meet the NATO minimum and to see whether there has been any financial jiggery-pokery to enable us to do so.

In a nutshell, we found that no rules have been broken. The Government’s figures and methodology conform to the NATO guidelines. It is true that, on the basis of including such things as armed forces pensions, which were not previously included but are allowed to be included, the Government will reach the 2% minimum. I use the word “minimum” advisedly, because that is what it is. It is not a target, but the minimum expected of each NATO country to contribute as a proportion of their gross domestic product to their defence. One could argue that it remains a target for countries that have never managed to reach it, but for those of us who have always exceeded it, often by very large amounts, it remains a floor, not a target, let alone a ceiling.

I know it is frowned upon to use props in debates in any Chamber, but the sheet of paper I have is so vivid that, even at a considerable distance and through the lens of a television camera, it is easy to read. The bar graph shows a consistent and steady decline in the percentage of GDP spent on defence since the mid-1950s. In the mid-1950s, we spent more than 7% of GDP on defence. In about 1963-64, that downward-falling graph crossed the upward-rising graph of what we spent as a proportion of GDP on welfare. Far from spending more on defence than on welfare, as we did until about 1963, we spend six times on welfare what we spend on defence. In the mid-1980s, we were spending roughly the same amount on defence, education and health. Since then, the descending graphs for defence expenditure and the rising graph for education and health have similarly crossed over, and we have declined closer to the 2% minimum. We now spend almost four times on health and about two and a half times on education what we spend on defence.

[Mr James Gray (North Wiltshire) (Con)]

I am interested in the chart that my right hon. Friend is describing, which appears as a corrigendum to our report. More interesting than the three Departments he mentions is the fact that, during that period, spending on overseas aid increased by a significant amount while spending on defence declined. Is that not a significant correlation?

[Dr Lewis]

It is significant, and it is indeed included on the chart. The only reason why I did not mention it is that, in comparison with the total spent on the other high-spending Departments, it is a relatively small proportion of our GDP. However, my hon. Friend is absolutely right because, such has been the decline in defence, our commitment to spend 0.7% on international development now amounts to one third of the total that we spend on defence, which comes in just above the 2% minimum.

When we called the report “Shifting the goalposts?”, we put a question mark at the end because we did not wish to prejudge it. There are two ways in which the Government could be said to have shifted the goalposts: first, by including things they are not allowed to include—we absolved them of that—and, secondly, by including things that they are allowed to include but never included in the past, which would mean that we are not comparing like with like in terms of our previous methods of calculating UK defence expenditure. The Defence Committee inquiry found that the NATO minimum would not have been fulfilled if UK accounting practices had not been modified, albeit in ways that are permitted by the NATO guidelines.

[Dr Lewis]

We did not find a hard and fast case of double counting, but we noticed in the past that there are items of expenditure that are highly relevant to defence and security that could fairly and usefully be catered for by the international development funds. Given that the 0.7% is protected, and given that one sometimes hears stories of the Department for International Development struggling to find creative ways of spending the money it has to dispose of, there is an opportunity, particularly in relation to soft power, to use elements of the international development money for measures that add to our security.

Of course, this is a rather crude measure, because gross domestic product can vary. If this country’s gross domestic product goes down but we spend the same amount on defence, it might appear that we are doing more when we are doing nothing of the sort. Similarly, when the value of the pound changes, as has happened in the short term following the Brexit decision, we see the effect on what we are able to buy for the money we have available for defence when we purchase big-ticket items such as the P-8 maritime patrol aircraft from the Americans, although a considerable amount of that purchase will find its way to the British defence industry. What I am driving at is that perhaps we ought to be talking not about shifting the goalposts, but trying to move the benchmark.

We should be reminding people that, in the 1980s—the last time we faced a significant threat from the east in Europe in the second and closing phase of the cold war—we regularly spent between 4.5% and 5.1% of GDP on defence. The similarity lies not only in the international situation. In the 1980s, we simultaneously faced a very significant terrorist threat in the form of Irish republican terrorism. We now face a similar threat in the form of fundamentalist Islamist terrorism.

It therefore seems appropriate to note that and, in the week that we were told that the first of the successor submarines for the nuclear deterrent will be named HMS Dreadnought, to remember a previous HMS Dreadnought, the battleship that changed the whole nature of sea power as far as capital ships were concerned in the years approaching the first world war. A famous naval arms race was going on between this country and Germany and, around 1909, there was a great deal of controversy that the German navy was drawing level with the grand fleet of the British Royal Navy in terms of dreadnought battleships. A public campaign was mounted, encapsulated by the phrase of the Unionist politician George Wyndham:

“We want eight and we won’t wait!”

My view, which I believe is shared by at least some other members of the Defence Committee, is that a new benchmark is perhaps needed for the percentage of GPD to be spent on defence: “We want three to keep us free!” In reality, if we go on at the 2% level, we are in danger of finding ourselves incapable of meeting the threats that face us today and will continue to face us in future.

[Mr James Gray]

We want four, or we’ll show the Government the door.

[Dr Lewis]

As always, I am delighted to be trumped by my hon. Friend in that direction. That is an absolutely splendid intervention and I thank him for it. I hope the Minister will go one better even and think of something to rhyme with five.

Select Committee on Defence

Debate between Julian Lewis and James Gray

Thursday 7th July 2016 Commons Chamber

[Dr Lewis]

Yes, indeed, and I thank the hon. Lady for that. She is a tremendously supportive member of the Committee; this is her first parliamentary term, but she has made a great start. I re-emphasise what I said about the importance of dialogue with Russia. The fact remains that different societies develop at different stages and go through different phases in their attitude to their relationships with the rest of the world. One mistake that the west clearly made after the downfall of communism was to evoke a degree of triumphalism at a time when magnanimity would have been more appropriate. Those in the west make a terrible mistake if they fail to recognise that Russia is and always has been a great power, and what we have to do is reach out the hand of friendship, while trying to discourage those aspects of the Russian tradition that seek to dominate lands beyond its own borders. Russia is a pretty large landmass and one would hope that the Russians could make a success of running their own country without feeling the need to impose their will on their neighbours.

[Mr James Gray (North Wiltshire) (Con)]

Potential Russian expansionism must be deterred by NATO with a fist of steel—there is no question about that, as we cannot let them do it—but one encased in a velvet glove. At the moment, we do not understand Russia and what it is doing. We must find better ways of understanding the Russians and talking to them about it. Does my right hon. Friend agree that one area where we simply do not know what they are doing is in the high north—in the Arctic? Russia is, without question, expanding its military capabilities up there and we do not quite know why. Does he agree that that was one area the report was not able to look into, and is there not room for further work on that?

[Dr Lewis]

I agree with every word my hon. Friend has said. Our report drops a very broad hint that the Arctic—the high north—deserves special attention, and I strongly suspect that if and when the Committee takes a decision to give it that special attention, my hon. Friend, who has led the way, with his all-party group for polar regions, in alerting the country to the significance of this area, will be playing a very prominent part indeed.

Britain and International Security

Debate between Julian Lewis and James Gray

Thursday 2nd July 2015 Commons Chamber

[Dr Lewis]

I hope to be able to continue that degree of far-sightedness in future.

[Mr James Gray]

I am sorry to interrupt my right hon. Friend to make such a tiny point. It is most kind of him to describe me as “gallant”, but I was only ever a private soldier in the Territorial Army. Surrounded as I am by brave soldiers who truly deserve the title, I should say that I am not in any shape, size or form “gallant”.

[Dr Lewis]

My hon. Friend is, in my eyes, as gallant as they come.

In my hon. Friend’s intervention, he drew attention—he was kind enough to give me the copy of the news article to which he referred—to what the head of the BBC had said. According to today’s edition of The Times:

“The head of the BBC has refused demands from 120 MPs to drop the term Islamic State on the ground that its coverage of the terrorist group must be impartial. Lord Hall of Birkenhead, the director-general, warned that an alternative name for the militants was ‘pejorative’ and said that the broadcaster needed to ‘preserve the BBC’s impartiality’.”

I have news for Lord Hall. I am well familiar with the concept of impartiality that applies to the BBC and independent television. I used to look into it decades ago. It is not absolute impartiality. The example that is always given is that there is no need for the media to be impartial between the arsonist and the fire brigade. The BBC is required to show due impartiality, which does not mean that it has to be impartial between terrorists and constitutionally constituted Governments and their armed forces. Lord Hall would do well to reflect on how he would react if somebody from his ranks of well-paid BBC executives said that the corporation needs to be impartial between the Nazis and the forces that fought them. He would not stand up for that suggestion for a moment.