Strategic Defence Review

Lord Kerr of Kinlochard Excerpts

Wednesday 9th October 2024 Grand Committee

[Lord Kerr of Kinlochard (CB)]

It is a great reassurance to the House that the noble Lord, Lord Robertson of Port Ellen, is associated with this review. I thank him for securing this debate and for the skill with which he introduced it. I hope that his review will tell it like it is.

We need to invest more and to invest better. The world is much more dangerous than when Labour last took office and the noble Lord set up his defence review. In the Middle East, the South China Sea and the Sahel and the sub-Sahara, we see higher tension and terror. In Ukraine, we see an existential threat to Europe’s liberties. There is nothing new in that—from the Moscow embassy, I watched the sack of Dubček’s Prague—but what is new is a NATO too long disarmed by a naive faith in the peace dividend and a US whose NATO commitment can no longer be taken for granted. The most chilling moment for me in the Trump-Harris Philadelphia debate was when Trump could not bring himself to say that he would support Ukraine. Putin would not stop at Kyiv—we face a 1938 moment. Ukraine’s war is our war, and keeping the alliance shield requires investment to deter and to insure against American retreat.

As the terms of reference for the defence review say, the first task of the state is to protect the citizen. That means that defence expenditure is not discretionary expenditure. When I worked in defence for Secretary of State Carington and Chancellors Healey and Howe, we had a commitment to maintain 55,000 troops on the mainland of Europe, and we always honoured it. We were spending 5% of GDP on defence, and the nation was not balking at that. When the noble Lord, Lord Robertson, ran his review, we were spending 2.5% or 2.3%—although the task has clearly grown. Russia spends 6% and is planning a 25% increase next year.

Of course it is misleading to think in terms of GDP comparisons and proportions, but it is absolutely clear that we need greater capability because the threat has got greater. We are not investing enough. I believe that if it was explained to the country why we were not investing enough and if the threat was spelled out, the country would not balk at it. I hope the defence review will tell it like it is.

We certainly need to invest much better. We must get recruitment right. Too many honourable Ministers have stood at the Dispatch Box admitting that there have been shortfalls but asserting that the corner has been turned. I am unconvinced. Outsourcing was always a mistake and it should now be corrected, but the much bigger problem is procurement, where the flaws are systemic. I recognise most of them from the 5% days when I knew a bit about defence, but they are still much more damaging now, with resources so much more constrained.

These flaws are not unique to us. In Washington, a bipartisan congressional commission reported this summer that:

“Fundamental shifts in threats and technology require fundamental change”


in how the Department of Defense functions, that the country must

“spend more effectively and more efficiently to build the future force, not perpetuate the existing one”,

and that the Defense Secretary and central staff

“should be more empowered to cancel programs, determine needs for the future, and invest accordingly”,

particularly in cyber, space and software. It said that the R&D paradigm needs to shift to adopting technological innovations from outside the department, and that 11 of the 14 technologies deemed critical for national security are “primarily non-defense specific”. That is what Congress is saying in Washington. Of course the US-UK analogy is not exact, but I believe all the elements I have mentioned are advice that we too should heed.

Investing better means a major update of the MoD’s procurement systems. The compact with the taxpayer has to be that, although we have to take more of his money, we will promise to spend it better. There must be no more sacred cows, interservice “You scratch my back, I’ll scratch yours” deals, or continually changing specifications to add gold plate. We need longer production runs and more emphasis on simplicity, serviceability—the secret of, for example, the Hawk aircraft programme’s success—and specialisation. We do not need, and we certainly cannot afford, industrial capabilities across the board. We need to invest where we lead in Europe, and where others lead we need to go for the reciprocal procurement deals that generate the export sales and hence longer production runs, which drive down costs. This means having the self-discipline to stop tinkering with specifications and avoid the delusions of autarky—no more Nimrods or Sting Rays. In-house solutions and UK-only programmes are very rarely best.

Two great Defence Secretaries, Denis Healey and Peter Carington, had no doubt that economies of scale and the foreign sales that would generate the jobs meant collaboration with the Germans to build tanks and with the Dutch to build frigates. Their German and Dutch colleagues agreed. Memoranda of understanding were signed, but the tanks and frigates were never built. Both programmes were sabotaged by folie de grandeur in Whitehall. The Germans went off and built their Leopard tanks and the Dutch built their frigates—also, as it happens, called Leopards—both of which cost much less than ours and so greatly outsold ours.

Can the new Healey Defence Secretary do better? I hope so, with support from the noble Lord, Lord Robertson. It is a bit presumptuous to offer the noble Lord advice because he knows the issues so much better than most of us, and it is probably unnecessary to urge him to tell it like it is because he usually does, but I hope he will press for the systemic procurement reform that the Ministry of Defence, like Washington’s Department of Defense, so badly needs. We need to invest much more, but we need to invest it much better.