Defence Spending

Debate between Lord Lancaster of Kimbolton and Lord Beamish

Tuesday 16th July 2019 Westminster Hall

[The Minister for the Armed Forces (Mark Lancaster)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate my hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) on introducing the debate. There can be few in Parliament so passionate about the armed forces and I am not surprised that it is she who called the debate. It has been highly constructive and has demonstrated a gratifying commitment to the defence sector on both sides of the House. We should start on a note of agreement: clearly everyone in the Chamber wants the defence budget to continue to rise, and that is gratifying. It is tempting to pick up on another point where we all agree—that it is the Treasury that is the enemy; but I cannot possibly say that. With a reshuffle coming next week, I do not want to limit my options too far. They are already pretty narrow, so let us not go further.

[Mr Kevan Jones]

DEFRA beckons.

[Mark Lancaster]

I doubt it.

As has been said, the first duty of any Government is the safety and security of the British people at home and abroad. I am proud that the Government have delivered on their NATO pledge to spend at least 2% of GDP on defence. They will be spending more than £186 billion on equipment and equipment support between 2018 and 2028. Aside from ensuring that our armed forces have the latest and best capability, our investment of around £19 billion a year underpins a world- class British industry, providing direct employment for 115,000 people and nearly 400,000 more across the wider supply chains. That substantial and sustained investment is not only vital to our national capability and prosperity and to supporting economic growth. It is also vital to our ability to counter the rising threats that menace us and all NATO members, including a resurgent and increasingly assertive Russia, and extremist terrorism across the world.

This year NATO celebrates 70 years as the foundation of our mutual security. The UK is one of very few NATO members that meet both their core spending guidelines by spending 2% of GDP on defence, of which 20% goes on major equipment and associated research and development. Defence spending in many NATO states is still too low, and although our allies are making progress on burden sharing, they must do more. The increase mirrors rising defence spending across the world, which makes it vital that the UK maintains its position as a leading player on the world stage.

The upcoming spending review is an opportunity to reprioritise our national investments across defence, ensuring that we can meet whatever the future may throw at us in an era of intensifying threats. The Department has done a great deal to drive out inefficiencies in defence, and there is more to be done, but we must also invest in new capabilities and in transforming the way defence operates, so that we can continue to defend the UK and project our influence.

First, we must mobilise defence to meet rising threats. The international situation is darkening. The rules-based order that has kept the peace for so long is under constant pressure and the external threats that confront us increasingly come from multiple directions. Despite the coalition’s success in degrading the power of Daesh, the threat of terrorism is still with us, while malign cyber-warfare and proxy warfare are rapidly changing the face of conflict. The nation’s approach to future spending decisions must reflect those new realities.

Secondly, we have to modernise and innovate—to embrace new technologies to ensure we have a competitive edge over our adversaries and to identify opportunities to sustainably reduce our cost base, which will require some up-front investment. The Department is investing about £800 million through the defence innovation fund to keep us ahead of the curve, and ring-fencing £160 million of its budget this year for the new transformation fund. Thirdly, on efficiencies, defence has to transform the way it does business by liberating new industry thinking and tackling the behaviours and practices that have racked up excessive costs in the past. That means tackling the mindset of short-term decision making that leads to poor value for money. We must invest in technology now for long-term savings.

I want to answer a couple of points raised in the debate. The MOD does not collate defence expenditure figures for regions, but the average spend per person in the UK was £290 in 2017-18, and the MOD spends some £19 billion a year supporting 115,000 jobs. That means that one in every 220 jobs in the UK is in defence. On the accusation that there have been cuts under the present Government, since 2014 defence spending has increased year on year and we now spend £39 billion—rising to £40 billion by 2020. [Interruption.] I would also say to the right hon. Member for North Durham (Mr Jones), having served in Afghanistan in 2006, that the sort of commitment that we had, with so many of our troops serving on operations overseas in Iraq and Afghanistan, made for an environment very different from today’s. With the different threats we face at any one time, it is sometimes difficult to compare like with like. Our relationship with strategic suppliers in the UK defence and security sector is vital. The armed forces support an industrial base in the UK providing employment to about half a million people.

I was delighted that many Members raised the issue of mental health in the debate. In the autumn Budget the Chancellor announced £10 million to support veterans’ mental health and wellbeing needs, and in January the armed forces covenant fund opened a £3 million funding programme to fund innovations and improvements to veterans’ community centres. We are considering investing more in veterans’ mental health. Accommodation is another key issue for many service personnel. We are looking closely at the new accommodation model, which is aimed at giving choice to service personnel. Equally, on pay, the Armed Forces Pay Review Body has recently presented its latest findings, to which the Government will respond in due course.

I end on a note of consensus again. I am delighted that in this Chamber at least we are committed to armed forces personnel, and to a rising defence budget.

Oral Answers to Questions

Debate between Lord Lancaster of Kimbolton and Lord Beamish

Monday 18th February 2019 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

15. What steps he has taken to promote UK prosperity in his Department’s procurement decisions.

[The Minister for the Armed Forces (Mark Lancaster)]

Since 2015, we have published a national shipbuilding strategy, refreshed defence industrial policy to help strengthen UK competitiveness and launched the future combat air strategy. We engage with global primes to create opportunities for all tiers of the UK supply chain.

[Mr Jones]

In the light of the Ministry of Defence decision to open up the procurement process for the fleet solid support ships to international competition, will the Minister explain what weighting will be placed on national prosperity in awarding those contracts?

[Mark Lancaster]

The one thing we are clear about is that we are constrained in that process because the fleet solid support ships are not warships; they are not frigates, destroyers or indeed aircraft carriers. However, I can reassure the right hon. Gentleman that that competition will be judged not solely on price but also on various other factors, and I am delighted that a UK consortium will be bidding.

Oral Answers to Questions

Debate between Lord Lancaster of Kimbolton and Lord Beamish

Monday 14th January 2019 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

T7. Tomorrow afternoon, the funeral takes place of Acting Corporal Iain Dodds, formerly of the Royal Electrical and Mechanical Engineers. His family are obviously grieving. He died, very tragically, before Christmas, at the age of 39, following years of adjusting having left the service after serving in both Iraq and Afghanistan. May I put on the record my thanks to the Minister for the Armed Forces for helping the family with the funeral arrangements?

[Mark Lancaster]

I am very grateful to the right hon. Gentleman for his acknowledgment. In cases like this, it is absolutely right that collectively across the House we should act in the way we have. I am delighted that we have managed to put things in place to help the family.

Oral Answers to Questions

Debate between Lord Lancaster of Kimbolton and Lord Beamish

Monday 15th January 2018 Commons Chamber

[The Minister for the Armed Forces (Mark Lancaster)]

My hon. Friend is a champion for the cadets. With more than 800 cadets and 125 adult volunteers in 20 detachments, the Hereford and Worcester Army Cadet Force demonstrates how the cadet experience provides opportunities for young people to develop self-discipline and resilience. I started my military career in the cadets, I am a great fan of the cadets, and we certainly continue to support the cadet expansion programme.

[Mr Kevan Jones (North Durham) (Lab)]

T7. The national shipbuilding strategy states that overseas nations will order 40 Type 31 frigates. It is nearly 40 years since we last successfully exported any frigates, so will the Minister explain how that figure was arrived at? Is there any fact behind it, or is it just optimistic spin?

Armed Forces Pay

Debate between Lord Lancaster of Kimbolton and Lord Beamish

Wednesday 1st November 2017 Commons Chamber

[Mark Lancaster]

I will move on in a moment to that very question. I would add that many of us also sat through Prime Minister’s questions, and I would simply refer the hon. Lady to the very powerful argument that the Prime Minister made in response to the question from my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) on the very subject she has raised.

The second point this motion ignores is the impact of pay progression. Officers and other ranks are tied to incremental pay scales, and they routinely and regularly move up the bands. The hon. Member for Llanelli (Nia Griffith) talked about privates. The average private soldier starts on a salary of £18,673. After one year, through incremental pay alone—not including the 1% pay increase—that rises to £20,029, which is an increase of 7.26% in one year. After three years, the salary rises to £21,614, which is an increase of 15.8%, not including the 3% increase that would have been given. That is an increase in pay of almost 20% over the three years.

[Mr Kevan Jones]

I think that the hon. Gentleman is being completely disingenuous—

[Mr Jones]

The Minister is wrong. The point is that, in any job, people get a pay increase because they are being trained and their ability to serve increases as that goes on. The fact is that the yearly increases my hon. Friend the Member for Llanelli (Nia Griffith) mentioned affect a private’s pay because they affect the levels of the bands and the percentages. He cannot argue that, just because somebody gets pay progression, not giving them an increase in their basic pay every year will not affect their ultimate pay. Of course it will.

[Mark Lancaster]

I am slightly worried about the hon. Gentleman’s approach. We have actually been great friends in this House for many years, so I am somewhat surprised that he called me disingenuous. I am sure that I will get my revenge at some point. As somebody who continues, after 29 years, to serve in the armed forces, I would like to think that accusing me of all people of being disingenuous when it comes to the armed forces is slightly unfair. I like to think that I have done my bit.

At the end of the day, I do not think that a private soldier receiving £18,673 in their pocket on day one—admittedly before tax—and then receiving £21,614 after three years will care too much whether that is due to pay progression or annual increases; it is money in their pockets.

--- Later in debate ---

[Mr Kevan Jones]

It’s less.

[Mark Lancaster]

Here we go: the hon. Gentleman says—perhaps this is testimony to Labour mathematics—that £21,614 is less than £18,673. [Interruption.]

--- Later in debate ---

[Mark Lancaster]

I am a very agreeable chap, but this is yet more speculation from The Times. No decision at all has been made to scrap the operational allowance. Every year since the operational allowance was introduced 12 years ago, there has been a review of where it should and should not apply. Soldiers have not been told that they will not receive it when they go to Iraq. I am deeply proud that this Government have doubled the operational allowance from £14 to £29. Finally—to get the last word, for the time being at least, with the hon. Member for North Durham (Mr Jones)—none of those figures takes into account the substantial rise in the personal tax allowance introduced while this Government have been in power.

[Mr Kevan Jones]

Will the Minister give way?

[Mark Lancaster]

I will not give way at the moment—I am taking my revenge—but I am sure he will get another chance.

Despite fiscal constraint, salaries in the armed forces throughout this period have not stagnated. Indeed, they have actually risen on average by 1.5%. What is more, the MOD has the option of introducing targeted payments where there are particular recruiting and retention issues. These payments can range from time-limited financial incentives through to longer-term recruitment and retention payments that recognise the particular challenges we face in retaining certain specialisms, such as military pilots or submariners.

That brings me to the third aspect of the pay story, which has been conveniently glossed over. Joining our forces comes with a range of often unacknowledged additional benefits: a non-contributory pension scheme, subsidised accommodation and food, access to free medical and dental care, and allowances packages—I have just mentioned one of them—towards additional costs. It is therefore unsurprising that pay is neither the primary reason why people enter the service, nor the primary reason why they leave.