Fiscal Policy: Defence Spending

Lord Howell of Guildford Excerpts

Monday 3rd February 2025 Lords Chamber

[Lord Coaker (Lab)]

On VAT on school fees and the impact on military families, as the noble Baroness, Lady Goldie, just pointed out, the Government have increased the continuity of education allowance, which now meets some 90% of the increase in fees that military families will face as a consequence of the VAT rise. That allowance is there to support military families in the way she said, and the VAT increase has been met in a way that is consistent with that policy, through the uplift in the allowance to 90%.

[Lord Howell of Guildford (Con)]

My Lords, the Minister was speaking earlier this afternoon with perspicacity about the changing nature of warfare. Does he agree that when we talk of defence expenditure, we are talking far beyond the MoD budget and the cost of military equipment? New technology threatens and exposes the civilian population as never before, and more directly than at any time in our history. In the Russian attack on Ukraine, it is the attack on its infrastructure, facilities and energy systems that is seen as the main assault, undermining and demoralising the civilian population and destroying any achievements made on the front line. Will the Minister assure us that in looking at our defence expenditure, we are focused on energy and the fact that equipment now exists which would destroy our entire energy system and create social chaos in an amazingly short time?

[Lord Coaker (Lab)]

I thank the noble Lord for his important question. Notwithstanding the debate about the total quantity of defence expenditure, he is right to point out the changing nature of warfare. We are looking to see how we can further protect the underwater cables that bring energy to this country; he might have seen some of the debate that took place last week on that. The RFA “Proteus”, which was bought for the RFA by the previous Government, is one example of how we do that. The defence review is looking at the purchase of a second ship, and various other capabilities are being developed. The noble Lord also made the point about our own critical national infrastructure. There is no doubt that we will have to consider homeland security and how we protect that infrastructure, and the defence review will do that. As I said earlier, hybrid warfare and the way systems are impacted by data and those sorts of attacks also needs to be considered.