Defence Review

Lord Stirrup Excerpts

Thursday 18th January 2018 Grand Committee

[Lord Stirrup (CB)]

My Lords, the Treasury-mandated starting point for the 2010 defence review was a reduction in the MoD’s budget of between 10% and 20% to be achieved over the first three years. The measures necessary to achieve such savings so quickly proved unpalatable, even to a Government focused wholly on the elimination of the deficit over the span of one Parliament. But even the savings that were eventually made, of some 7.5%, inevitably left a strategically incoherent defence programme. The best that could be done was to reach a position in 2015 from which coherence could be rebuilt, provided that substantial real-terms increases were made in the defence budget in each of the succeeding years.

In the 2015 review, the MoD produced a plan to restore coherence, although more slowly than envisaged in 2010, but the plan was inadequately funded. It relied on wholly unrealistic assumptions about the savings that could be made through efficiency. When, unsurprisingly, these failed to materialise, the plan was in trouble, and the subsequent fall in the exchange rate only exacerbated the problem.

The Government now face a choice: they can provide more money and fund the plan properly or they must come up with a new plan. I, of course, urge them to adopt the former course, not least because this is the minimum action that is required. Let it be remembered that the 2015 plan was about achieving coherence, not about restoring our defence capabilities to where they should be in this challenging and dangerous world. That would require an annual expenditure of more like 3% of GDP. Alas, I do not expect the Government to go so far. However, I trust that the Minister will, in due course, be able to confirm that they will at least do this bare minimum. I, like many other Members of your Lordships’ House, would view anything less with the gravest concern.