Ministry of Defence

Lord Coaker Excerpts

Monday 26th February 2018 Commons Chamber

[Vernon Coaker (Gedling) (Lab)]

I want, first, to say something about spending and then to say a bit more about some of the points that can be made from the actual estimates. I think that that would help the defence debate. I will refer to historical defence spending but, whatever the rights and wrongs of that argument, let me say this: there is no disguising the fact that this country is not spending enough on the defence and security of the realm. I have said that before and I will say it again. That is the frank reality. That is the truth. That point has been heard—loud and clear.

My advice to the Minister is that he and the Defence Secretary use the power of this Parliament’s voice to go to the Prime Minister and tell her that we, the elected representatives, by and large do not think that we are spending enough on the defence and security of the country. As the Chair of the Defence Committee said, it is no good generals, admirals, national security people or whoever is responsible telling secret meetings that there is a real problem, and then, in three weeks’ or three months’ time, trying to tell the British public that £x million or £x billion more is needed and expecting them just to click their fingers on the basis of, “If you only knew what we knew.” It is not good enough and it is not satisfactory.

I have said at many meetings that the whole of Government need to shift their attitude and be clear what we are talking about. My hon. Friend the Member for North Durham (Mr Jones) will make this point in a different way. The tables are available from the House of Commons Library. Hon. Members can go back to when they want. One paper goes back to 1956, showing the percentage of GDP spent on defence at 6%. It is now at 2%. We can see the ups and downs within that time but, as my hon. Friend pointed out, the table is clear.

Let me give Members one stark reality. The out-turn figure for the defence budget in 2009-10 was £45 billion at 2016-17 prices. These are not my figures; they are the Library’s. If the Government think that they are wrong, they should tell the Library. The 2016-17 out-turn figures, at 2016-17 prices, were just over £35 billion. There are some notes at the bottom which, quite frankly, I do not properly understand: they talk about changes in accounting practices, and counting this or counting that. However, there can be no doubt that it is a huge reduction. I totally agree with the Chair of the Defence Committee that we are now in a position where we all need to say that more should be spent and more has to be spent. The drop in the figures in that table is frankly astonishing.

Let me ask a couple of questions of the Minister that I really want answered. One of the big things that came out of the defence debate that we had a few weeks ago was that the National Security Adviser said that anything he found—it did not matter what it was—had to be fiscally neutral. The Chair of the Defence Committee said, and I agree, that the state-on-state threats are much greater and more intensified than they were. But apparently that does not matter: it has to be fiscally neutral. Can I ask the Minister a direct question? If the modernising defence programme says that the Government should be spending billions of pounds more to secure the defence of this country, is that whole programme predicated on a fiscally neutral position, or is it predicated on the Government funding what their modernising defence programme tells them?

As the Chair of the Defence Committee said, the defence threats are not reducing but intensifying. It is not acceptable to me, or, I believe, to this House, to say that as we are now facing a greater state-on-state threat because the terrorist threat is apparently not quite as big as it was, we will take some money from this budget and move it to that budget. That is not good enough, because we do not know what will happen in three, four, five or six years’ time. We cannot take money from a capability that is not necessarily needed quite as much at this time in order to pay for something else. It is the methodology of madness.

[Mr Ellwood]

The hon. Gentleman will perhaps be surprised by how much I will say in my speech that—I hope—he agrees with, as I agree with him. The capability review was fiscally neutral, and we found that unacceptable. That was the first thing that the Secretary of State dealt with, perhaps breaking the trend that my right hon. Friend the Chair of the Defence Committee suggested was the case. Let me make it very clear that the study that we are doing now is not fiscally neutral, but we do have to decide what our defence posture is and how much it will cost.

[Vernon Coaker]

There we go—that is the power of Parliament. That is the point I am making. We had the debate before and this was fiscally neutral. The original review—the national security and defence capability review, or whatever it was—was not set up by accident; the Government set it up, and defence was included in it. Parliament said that that was not acceptable, and the Government responded and took it out. We then said that it was not acceptable for that review to be fiscally neutral, and now the Government are saying that it will not be. Of course no one is saying that we should buy chariots or whatever—what we have has to be relevant to the needs that we face. Before, the process was budget-driven: it was a case of having whatever it needed to be in order to meet the budget requirement.

It is going to be difficult for the Government to do this when, for example, we are told today that, even in their response to the Select Committee’s report on the F-35 programme, they will not put a figure on what one F-35 is going to cost. Then the Government say, “We’re buying 138 F-35s—that is the current plan—and 48 will be F-35Bs, but we’re not sure what variant the other 90 are going to be.” How can the Government talk about being fiscally neutral in their plans when they could not say to the Defence Committee a couple of months ago what the cost of the F-35 is and they cannot tell us in their response published today either?

[Mr Kevan Jones]

It is not just the F-35. Much has been said in the past few weeks about the procurement of the new Type 31e frigate. There is no line in the defence budget for that. Likewise, the P-8, which is being trumpeted as a vital need for our maritime patrol aircraft—I agree—is not capable of delivering the sonar buoys or torpedoes that are currently being used, so there is added cost there.

[Vernon Coaker]

I completely agree with my hon. Friend. That is the point of the debate on estimates days. For the Minister to be able to say that we will have the capabilities that we need to meet the threats that we will face, we need to be able to say how much those capabilities are going to cost. My hon. Friend raised the issue of frigates; I am using the example of the F-35s. Cannot the Minister go back to the people who plan this and say, “We need some detail on these costs. Otherwise, how can we project forward what the equipment plan or any other plan is going to cost us?”

[Mr Ellwood]

The hon. Gentleman answers his own question in a way. He asked for, and supports, a fiscally open defence modernisation programme. That will pose the question as to whether we want A variants or B variants of the F-35s. The study needs to be done. On the individual cost, he knows from his own experience that it will vary, as the cost of prototypes does. There was not a unit cost for the F-16 because it was a prototype. It is very difficult to pinpoint the exact cost because the life cycles, the upgrades and the weapons systems that would be put on board vary. That is why we cannot provide the exact figure that he is seeking.

[Vernon Coaker]

I will leave it there, but the Government need to have a better idea, and make it public to the Select Committee and Parliament, of the individual costs. I say gently to the Minister that, otherwise, in a year’s time or two years’ time, he will find himself in exactly the same place that the Government find themselves now, where the National Audit Office is pointing to various gaps in the affordability of the equipment programme.

Let me give another example of where the Government need to be clearer with regard to their estimates. I again say this as something that the Minister and the Government should be saying to the Treasury and to the Prime Minister. The hon. Member for Belfast East (Gavin Robinson) mentioned this point. As the Minister knows, the Government have had to bring forward £300 million to pay for some more up-front costs with regard to the deterrent programme. When they were asked where that money has been taken from, there was a very vague answer, to put it mildly. In essence, therefore, it is an IOU for future programmes. I think that between 2006 and 2007—certainly in the last few years of the Labour Government—where there was an up-front cost that perhaps needed to be taken from future programmes, the Treasury came forward with an uplift to the defence budget to pay for it. That then gave some certainty to future programmes.

Because the Treasury has not uplifted the Ministry of Defence figure by that £300 million, there is already a potential £300 million gap in the future—next year or the year after. I say this to the Government, again trying to be helpful: the Ministry of Defence should go to No. 10 and say, “We believe that where there are additional costs with regard to our deterrent programme that were unforeseen, or there was a growth in those costs, the Treasury should fund that uplift in costs, as was previous practice”—for example, the £300 million. I use that as just one example.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

My hon. Friend has given two excellent examples. There are plans for a super-garrison at Catterick. I understand that service accommodation was meant to be completed by 2020 but is now estimated at 2023, which will clearly create cost overruns. Around the CarillionAmey contract, again, we are seeing a lack of maintenance on that, which will end up costing us more. We are seeing cost overruns in not just equipment but a whole range of areas, including accommodation.

[Vernon Coaker]

My hon. Friend gives another good example.

I have given the Minister a couple of examples, notwithstanding all the questions. I make a plea again to him and to the Government: when we know that the Government are considering their options on amphibious ships, please do not say to Parliament that these are things they cannot talk about and that the Government do not comment on leaks. That does not help us. It does not help this Parliament in trying to support Ministers to ensure they have the resources to defend the country. We then have a situation where, three months or two years down the line, those capabilities are scrapped, and we are all left thinking, “If only we’d known a bit more.”

Let me also mention something positive that the Government should do. We should help to explain this to the British public. Tucked away in annex A of the estimates, under the “Memorandum for the Ministry of Defence Supplementary Estimates 2017-18”, the Government list the additional estimates that they have had to ask the Treasury for for operations. I do not believe the British public would know how many operations our armed forces are rightly involved with.

If we want to build support for our armed forces, we should be telling the public that there is £1 billion for operations, peacekeeping and the MOD’s share of the conflict, stability and security fund, and that there is a further allocation of £84 million for the UK’s contribution to Afghanistan, as well as allocations for the wider Gulf, counter-Daesh activity, the EU mission to counter migrant smugglers in the Mediterranean, NATO enhanced forward presence in Estonia and Poland, enhanced intelligence and surveillance, and support to UN peacekeeping operations in Somalia and South Sudan. Those are just some examples, and the Treasury is giving money to the MOD to support all those different things.

Our country is proud of that work. Our country is proud that our armed forces are involved in defending human rights, defending democracy and doing what they can to ensure that stability exists and conflict is prevented. The Government should be shouting much more loudly about that. It should not be tucked away in an annex; it should be one of the forefront siren calls that the Minister makes in these estimates debates.

I finish with this, and it goes back to where I started. We are not spending enough money on the defence and security of the realm and the role that this country plays in promoting democracy and defending human rights across the world with our allies. All power to the MOD’s elbow when it goes to the Treasury and the Prime Minister to demand more money, but let that be done through the voice of this Parliament, where the majority of Members believe we should be spending more money and will support the Minister in trying to achieve that.

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[Vernon Coaker]

My hon. Friend makes a good point. If we do exactly what he says, we will be in a ludicrous position. We will be saying, “To facilitate scrapping Albion and Bulwark, we will modify our aircraft carriers,” which takes us into the realms of never-never land. What does that mean? We are not going to do a beach landing from an aircraft carrier. We might have a few more helicopters or a dry dock facility, but the idea of carrying out an amphibious landing from an aircraft carrier belies the point of having amphibious craft, which is to land on beaches and lay marines off on them.

[Mr Jones]

I do not disagree with my hon. Friend, but that goes to the point—this was the problem back in 2010—of the Treasury being let in the door of the MOD, and being in control and in the driving seat. When I was a Minister, I chaired the finance group in the MOD when we were looking for savings and dealing with the Treasury. I know exactly what Ministers are dealing with. The Treasury does not understand the value of our armed forces and how they operate. I am glad that the Secretary of State seems to have wrestled control of that element back. If our defence policy is determined by Treasury figures, we will have very strange decisions that will not match strategic needs.

We keep hearing from the Government that they are meeting the NATO 2%. As someone who is committed to NATO and who supports it—I am a member of the NATO Parliamentary Assembly—I can say that that is an academic argument. It is important in that we are trying to get people to spend a minimum of 2%, but it is also important to look at what our NATO partners spend that 2% on. It is clear that the Government have rejigged the figures. I am not saying that they have done something illegal or anything like that, but in 2015, they changed how defence spending was calculated. War pensions of £820 million were included; assessments of contributions to UN peacekeeping of £400 million were included; and the pensions of retired military personnel, which was another £200 million, were included. The thick end of £1 billion of that 2% is made up of things that the hardiest defender of Government policy would not think were frontline defence commitments.

It is about being realistic. It would be fine if we were spending only 1.8% on defence but spending it on the right things. There is a case for increasing the defence budget—that argument was made by the right hon. Member for New Forest East and by my hon. Friend the Member for Gedling—but we need to do it by setting strategic objectives that show why we need more than we are spending. There is also an onus on the MOD to ensure that what it is spending is not only efficient, but provides value for money for the taxpayer.

All hon. Members who have contributed to this debate have said that our armed forces are universally and rightly held in the highest regard. I agree, but it is not just national sentiment; it is because they are vital for our nation’s security and because they define our place in the world. I do not think for one minute that the new Secretary of State or his ministerial team lack commitment to the armed forces—they are all committed to defence and want to do the best for our armed forces, so I wish them well in the battle they will have with the Treasury—but without new money or a radical rethink about the commitments we ask our armed forces to fulfil, I fear for our forces’ future, and more importantly for Britain’s place in the world.

[Douglas Ross (Moray) (Con)]

It is a pleasure to speak in the debate. I congratulate my hon. Friend the Member for Gainsborough (Sir Edward Leigh) and my right hon. Friend the Member for New Forest East (Dr Lewis) on securing it in this year’s series of debates on estimates. They have long been strong champions of our armed forces and are rightly proud of Britain’s history of defence.

That pride is not misplaced. This country has the fifth-largest defence budget in the world. I have the honour of representing two military bases in my constituency —Kinloss barracks and RAF Lossiemouth. Moray has a long history of service, and the armed forces are intertwined in our local communities. In the last year alone, servicemen and women from the two bases in Moray have served in South Sudan, the Falkland Islands and Romania, and in Cyprus as part of the international efforts against Daesh in Iraq and Syria. Scotland and indeed Moray have long benefited from the UK’s defence budget, and the defence industry is one of Scotland’s great success stories.

I am delighted that, in the numbers we are discussing, we can see that investment will continue to increase. Defence spending is due to rise by 3% in real terms over the next year, which is an increase of more than £1 billion. We will feel that investment directly in Moray. The arrival of nine P-8 Poseidon aircraft at Lossiemouth will mean 400 extra jobs and investment of £400 million. There can be no doubt that the Government remain strong on their commitment to the defence of our country. I look forward to seeing the positive impact that that new capability will bring to Moray.

On Thursday, I look forward to welcoming the Secretary of State for Defence to the official turf-cutting ceremony for the new Poseidon strategic facility at RAF Lossiemouth. I also commend the work he has embarked on since taking up his position. His recently announced defence modernisation programme provides the perfect opportunity to assess our spending. I know that he will not shy away from the difficult decisions that need to be taken to safeguard the future of our world-class armed forces.

[Vernon Coaker]

You’ve got the job.

[Douglas Ross]

If there is a job going, I will take it.

I should like to touch briefly on an extremely pertinent issue currently affecting MOD personnel—serving and civilian—based in Scotland. The budget confirmed by the SNP Government last week raises taxes for anyone earning more than £33,000 in Scotland. It will also mean that someone serving in Scotland at the same rank and doing the same job as someone in England will pay more tax if they earn more than just £26,000. That is simply unfair and unacceptable. To put that in perspective, everyone above the rank of lance corporal will pay more in Scotland, as will every single Royal Navy officer. That is an attack on our hard-working service personnel and a kick in the teeth for all those who have chosen to serve our country. I thank the Minister and the Secretary of State for their communications—they met my hon. Friend the Member for Angus (Kirstene Hair) and I to discuss the issue. I make another plea on behalf of MOD personnel in Scotland. The “Nat tax” is unfair and cannot be allowed to stand, and I call on the UK Government to use the powers available to them to mitigate the worst effects of that ill-thought-through tax rise.

We are a military nation, and Scotland is proud to play its part in that. Moray is a fantastic example of what Government investment in defence looks like, and we will continue to play our part in the defence of our nation and our interests around the world. Under this Government, and with a rising defence budget next year, I have no doubt that Lossiemouth, Kinloss, and our capabilities around the globe will continue to go from strength to strength.

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[Stephen Kerr]

There is a great difference between nationalism and patriotism, which is far more wholesome. It is no mistake that the leader of the Scottish National party herself has said that she very much regrets the fact that the word “national” is to be found in the SNP’s party name. But I am not here to talk about the SNP, disappointed though its Members will be to hear that. I urge Ministers across Government to take seriously the direct warning by General Sir Nick Carter that Russia poses a major threat that the UK would struggle to confront without an increase in defence spending.

I also want to mention recruitment. I believe that subcontracting recruitment to a civilian business was not a good decision. Such recruitment cannot be determined by someone working with a spreadsheet, and I seriously doubt that any private company has what it takes to function as an adequate recruitment agent for the British armed forces.

Housing for our armed forces is also an issue. Some of the anecdotal stories shared with me about living conditions for service families are, quite frankly, nothing less than shameful. However, that is too broad an issue to be covered in the time available tonight.

We also need to be sure that our troops have the right equipment at the right time. There is a black hole in the budget, as has been admitted. We have laid orders for equipment that we do not have the money to pay for. If we are not careful—I say this as a member of the Select Committee investigating Carillion—we will find ourselves in a situation of robbing Peter to pay Paul that will become a vicious circle, and we all know where that will lead to.

[Vernon Coaker]

The hon. Gentleman is right to point out the difficulties that we can get into when we rob Peter to pay Paul. The Defence Secretary recently told the Defence Committee, in discussing the £300 million needed to support the development of the at-sea nuclear deterrent and the critically important Dreadnought programme:

“We have had to make sacrifices elsewhere in order to ensure that the programme keeps going”.

That is what this debate has been all about, and the hon. Gentleman is right to make that point.

[Stephen Kerr]

I am grateful to the hon. Gentleman, my colleague on the Business, Energy and Industrial Strategy Committee, for making that point.

In regard to capabilities, I very much regret the fact that the Royal Navy does not have the number of surface vessels that it requires to send both our aircraft carriers to sea at the same time with the prerequisite level of air and submarine protection. I lay that before the House as an example of the capability issues that we face. We further need to be sure that we are meeting the needs of modern warfare, as has been mentioned several times. The UK is vulnerable to cyber-attack, which presents a clear and present danger in terms of the peer-to-peer threat that we are living under.

Addressing these issues will require resources and a new range of skills for defence and for counter- attack. That is why I welcome the Secretary of State’s announcement a few weeks ago of the defence modernisation programme review. It seems to me that this review came about because he was faced with a choice between two sets of unpalatable cuts. Our armed forces are not only an emblem of our national pride that symbolises our national values; they are also a vital tool to project British values across the world. I believe, as a Conservative Member of Parliament, that no Conservative Secretary of State for Defence should contemplate undermining our defences further with more cuts. We must give our armed forces the reassurance and the resources that they need to do the job, and an increase in the defence budget should be forthcoming.

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[Stewart Malcolm McDonald]

There is nothing that I could add to make that point any better. The hon. Gentleman is absolutely right.

[Vernon Coaker]

The hon. Gentleman poses an interesting question. There was an SDSR in 2015, and the modernising defence programme, which will presumably have consequences, is going to be announced in the next few months. Just to be clear about what he is saying, is his argument that there should be another SDSR at the end of the five-year period in 2020 or before that?

[Stewart Malcolm McDonald]

I rather suspect that I cannot get the Government not to go ahead with its modernising defence programme. My preference would be for a proper SDSR, rather than this mini review, but we are where we are. Despite the supposed lifting of the fiscally neutral element, I fear that we are heading in the same direction. The hon. Gentleman will remember the statement: three of the four announcements were cuts. Let us not dress that up in any other language; they were cuts. I fully expect that to happen again when the announcement comes later in the year.

Setting aside our views on whether we should have the nuclear deterrent, the other alarming aspect of the NAO report is its rising cost. All of a sudden, it has gone up by £1 billion—overnight, it seems. It has gone up by so much that the MOD’s director general nuclear is having to review the costings, so I would welcome some information on when that review will happen, when an announcement will be made and when Parliament can expect to get the information.

I want to end on a note of consensus, so my final point is that the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie) made the very good point, with which I can find no reason to disagree, about making it easier for people from the British overseas territories to join up, instead of making them wait five years, which would be eminently sensible given the existing recruitment problems. Those problems have been well documented in the House, not least by the right hon. Member for Rayleigh and Wickford (Mr Francois) —I have just learned that I have been mispronouncing his constituency the entire time, but he is such a gent that he has not even told me.

This has been an important and informed debate, as it always is, and the House is better informed as a result. We look forward to the results of the mini defence review and to engaging with it. As the Secretary of State knows, the Scottish National party hopes that there will be a particular focus on the activity, or lack of it, in the high north. I look forward to hearing what the Minister has to say in his winding-up speech.

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[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.

[Vernon Coaker]

What the Minister has just said is very important. Will he confirm what he just said: this modernisation of defence programme is not fiscally neutral?

[Mr Ellwood]

I can say it again and I think I am going to say it a bit later, because it is in my speech: I am happy to confirm that it is not fiscally neutral. That is exactly why we are doing this. I am not saying this just because the Defence Secretary is in his place, but the first thing he recognised was the fact that the capability review was fiscally neutral and it was prohibiting us. We saw a lot of the stuff that came out in the media and so forth. The challenges that that would have imposed on our armed forces were exactly why there was a requirement to look in more detail at what our armed forces are doing. We now have that opportunity and we have to make the case as to what changes we need, what our defence posture is and how we move forward—