Major Defence Contracts

Lord Harlech Excerpts

Monday 3rd February 2025 Lords Chamber

Asked by

[Lord Harlech]

To ask His Majesty’s Government what assessment they have made of the economic impact of uncertainty surrounding major defence contracts.

[Lord Harlech (Con)]

My Lords, I beg leave to ask the Question in my name on the Order Paper and declare my interest as a serving Army Reserve officer.

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

My Lords, the Ministry of Defence recognises the importance of certainty in the MoD’s demand signal for industry. Making the right procurement decisions is a key enabler for improving effective equipment delivery to the Armed Forces and ensuring greater value for money for the taxpayer. This Government are determined to establish long-term partnerships between business and government, promoting innovation and improved resilience.

[Lord Harlech (Con)]

I thank the Minister for his response. Poland is now spending 4% of GDP on defence. Finland has a wartime strength of 280,000 and can call on a reserve of 870,000 troops. NATO allies are waking up to the fact that we must take defence spending seriously. Will the Minister do everything in his power to ensure that the Treasury understands why we must spend not 2.5% but 3.5% as a minimum on defence and make that change before the spending review?

[Lord Coaker (Lab)]

I thank the noble Lord for his Question and, as I always do, acknowledge his service to our country as a reservist. On defence spending, he will know the Government’s policy. In the spring the Government will set out a pathway to 2.5%. He will also be pleased to know that the Government have not waited for that; we have already increased defence spending by £3 billion in the next financial year. We are on a pathway to increased spending on defence.