Defence: 2.5% GDP Spending Commitment

Viscount Trenchard Excerpts

Thursday 14th November 2024 Lords Chamber

[Lord Coaker (Lab)]

I completely agree. The noble Lord will know that at various conferences and in various decisions I have made I have talked about the importance of deterrence. That has to be at the forefront of our minds as well.

[Viscount Trenchard (Con)]

My Lords, will the Minister answer more clearly the question from the noble and gallant Lord, Lord Craig of Radley, about sequencing? It seems to me that the noble Lord, Lord Robertson, cannot conduct his strategic defence review if he does not know the date by which 2.5% will be available to him. The Minister also said that we are second to the United States as a spender in support of NATO. However, this year Germany will spend £30 billion more than the United Kingdom on defence.

[Lord Coaker (Lab)]

What I meant about the UK’s position is that, when I visit European countries and go around the world, the UK is seen as one of the foremost leaders with respect to the military. The noble Viscount may point to Germany and its spending, but I am just saying that, in terms of leadership on Ukraine and the deterrent effect we provide, the UK is at the forefront.

I have answered the question from the noble and gallant Lord, Lord Craig, and others. The defence review team know the context in which they are working. The review will identify the threats and choices we have. As a consequence, at a fiscal event that we expect in the spring, we can then make decisions about the choices before us.

Let me finish with this: nobody should be in any doubt, as the noble Viscount knows, over this country’s determination to ensure that our Armed Forces are supported and given the equipment that they need to both deter those who seek to undermine us and be there to fight where necessary.

Defence Spending

Viscount Trenchard Excerpts

Thursday 31st October 2024 Grand Committee

Asked by

[Viscount Trenchard]

To ask His Majesty’s Government what progress they have made in laying out the roadmap to spending 2.5 per cent of gross domestic product on defence.

[Viscount Trenchard (Con)]

My Lords, I must declare my interests as honorary air commodore of 600 (City of London) Squadron in the Royal Auxiliary Air Force, and as a consultant to Mitsubishi Heavy Industries Ltd.

It is timely that we have a chance to debate defence spending today. Since the passage of the Defence of the Realm Act 1914, three days after the start of the First World War, it has rightly been maintained that the first duty of the Government is to protect and safeguard the lives of their citizens. The Armed Forces covenant, promulgated in 2011, starts with these two sentences:

“The first duty of Government is the defence of the realm. Our Armed Forces fulfil that responsibility on behalf of the Government, sacrificing some civilian freedoms, facing danger and, sometimes, suffering serious injury or death as a result of their duty”.


Churchill was fond of quoting the Latin adage, “If you want peace, prepare for war”. In 1943 and 1944, more than 40% of GDP was spent on defence. If this country should again become directly embroiled in a major military conflict, it is reasonable to assume that the Government would again have to spend a huge proportion of our national output on defence to fulfil their first duty. Surely it is absolutely necessary to spend enough on defence now to make it as unlikely as possible that we will again become embroiled in a major war. We all know that we are already involved, with our NATO allies, in Ukraine’s fight for survival against the Russian invader; it is a conflict that we cannot allow Ukraine to lose.

Today’s debate is not the occasion to discuss yesterday’s Budget. It is deeply disingenuous of the Government to go on and on about the black hole against a background where tax revenues are £21 billion higher than the OBR had predicted. I expected that the Chancellor might take the opportunity provided by the Budget to set out the long-awaited road map to spending 2.5% of GDP on defence. I feared she might say that we would have to wait until the report of the strategic defence review by the noble Lord, Lord Robertson of Port Ellen—for whom I have the very highest regard—is published, but she did not even say that. She said that

“we will set a path to spending 2.5% of GDP on defence at a future fiscal event”,—[Official Report, Commons, 30/10/24; col. 822.]

but she has also said that there will be one Budget a year. Does this mean that we will not even know the pathway to spending 2.5% until the next Budget next autumn? In that case, how can the noble Lord, Lord Robertson, produce a coherent defence review next spring?

However, we surely know that we must anyway spend at least 2.5% of GDP on defence now. It is quite possible that the SDR will find that the military capabilities we need now will cost a lot more than can be afforded even by spending 2.5% of GDP on defence.

In the debate introduced by the noble Lord, Lord Robertson, on the SDR on 9 October, the noble and gallant Lord, Lord Stirrup, referred to NATO’s recent assessment that if its members are

“to contribute military capabilities adequate to the challenges that the alliance now faces, they will need to spend around 3.7% of GDP on defence”.—[Official Report, 9/10/24; col. GC 224.]

If NATO is correct, investment in defence needs to be above 3% of GDP, not the 2.5% that the Government say they aspire to but for which, even now, they have not so far set out a firm plan.

As the Committee is well aware, the world is in a more turbulent and unpredictable state than it has ever been since the end of the Second World War. The noble Lord, Lord Robertson, has described China, Russia, Iran and North Korea as the deadly quartet. As I pointed out in the debate on the SDR, the previous Government’s paper, Defending Britain: Leading in a More Dangerous World, published in April this year, explained that any delay in setting out a pathway to reaching 2.5% was likely to lead to front-line cuts at the worst possible time for our Armed Forces.

Spending more will not in itself be enough. Reform of the Ministry of Defence to build a less risk-averse department and improve its procurement process is also essential. Can the Minister confirm that the fact that the SDR was to be reported to not only the Prime Minister and the Secretary of State for Defence but the Chancellor of the Exchequer was not significant? On that occasion, the Minister said:

“The Government have an absolute commitment to 2.5%. I know that that is not what some people want to hear and that there is no timeline given to it, but there is an absolute commitment to 2.5%. It is not an aspiration”.—[Official Report, 9/10/24; col. GC 262.]


We now know what that means: merely setting a path at a future fiscal event.

The noble Lord, Lord Robertson, will assess what threats we face and what capabilities we need to address them, but his task has been made all the more difficult by the Chancellor’s signal that the uplift in defence spending is not the Government’s urgent priority, which it should be. It is at least welcome that the AUKUS programme is protected.

The UK has been one of the few NATO countries to meet the 2% spending target, and our response to the Russian invasion of Ukraine was much appreciated by our allies and by the Ukrainians. However, we are now placing our ability to provide leadership in military operations at risk, because we have in recent years been increasing our defence expenditure at a much slower rate than other nations. Germany, which in 2014 was spending only 1.2% of its GDP on defence, has committed to spend $97.7 billion on defence this year, which is an increase of 29.45% over 2023. France has increased its defence budget by 6.05%, and the United States by 7.21%. Against that, we have managed to provide an uplift of only 1.73% after adjustment for the implementation of the new accounting standard, IFRS 16. That is one of the smallest increases among NATO members. It means that Germany will be spending nearly 40% more than we are. The Chancellor announced an increase of £2.9 billion for next year, but that is not nearly enough given the serious threats we face and the current underfunded state of the Armed Forces. Recruiting is badly affected by inadequate, poorly maintained accommodation and facilities. It is shocking to hear that there are now more civil servants in the MoD than the total strength of the Royal Navy and Royal Air Force.

As a precondition of deploying our aircraft carriers, or indeed any major maritime or land-based assets, to any conflict zone in partnership with our allies, it is absolutely necessary to control the air environment. That is why we need the Global Combat Air Programme —GCAP. Its advantage over alternatives includes its greater range. It will bring a contribution to NATO that nobody else can bring. If we do not fulfil our commitment to our partners Italy and Japan to deliver this project by 2035, it will be disastrous for our international relations and will signal the end of our ability to bring in partners to major defence projects. Some 70% to 85% of our defence exports in the last five years have been combat air in nature, so to fail to honour our commitments to this project would have huge implications for our defence industrial base.

Will the Minister now give a much-needed commitment, or at least say more than the Government’s position on GCAP, which is that

“we continue to progress on that”?—[Official Report, 25/7/24; col. 723.]

That is not quite the firm commitment that our Japanese and Italian friends are seeking. Having heard the Chancellor’s disappointing words yesterday, their concerns and those of all our allies will be seriously heightened.

I thank all noble Lords who are to speak in this debate, and I look forward to their contributions and to hearing what the Minister has to say.

Strategic Defence Review

Viscount Trenchard Excerpts

Wednesday 9th October 2024 Grand Committee

[Viscount Trenchard (Con)]

My Lords, I congratulate the Government on their wise decision to place the strategic defence review in the most capable hands of the noble Lord, Lord Robertson of Port Ellen, who is universally well regarded on all Benches; I too thank him for introducing this timely debate. I declare my interests as a consultant to Mitsubishi Heavy Industries Ltd, the lead industrial partner for Japan in the JICA project, and as the honorary Air Commodore of 600 (City of London) Squadron, Royal Auxiliary Air Force.

Under the previous Government, we saw two reviews: the integrated review of security, defence, development and foreign policy in 2021 and the integrated review refresh in 2023. Since then, the global security landscape has progressively deteriorated. It is in a more turbulent and unpredictable state than it has ever been since the end of the Second World War. The noble Lord, Lord Robertson, described China, Russia, Iran and North Korea as “the deadly quartet”, and many defence experts consider that the global community is on the path to a third world war.

The national defence strategy of the United States, as adopted in 2022, named China as a pacing challenge and identified it as the only competitor with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to advance that objective. Against this background, it is essential that His Majesty’s Government—as well as the Governments of all friendly nations that believe in the international rules-based order—remember that the defence of the realm and the safety of the public is the first duty of a Government.

Can the Minister confirm that the fact that the review is to be reported to not only the Prime Minister and the Secretary of State for Defence, but the Chancellor of the Exchequer, is not significant? I worry that the Treasury may exert undue pressure on the review’s findings to prevent the Government setting out a clear pathway to increasing defence spending to at least 2.5% by 2030. I agree with the view of the noble and gallant Lord, Lord Stirrup, that the figure should be increased to 3% as soon as possible. As the previous Government’s paper, Defending Britain: Leading in a More Dangerous World, published in April this year, explained, any delay in setting out a pathway to reaching 2.5% is likely to lead to front-line cuts at the worst possible time for our Armed Forces. Spending more will not in itself be enough; reform of the Ministry of Defence, to build a less risk-averse department and improve its procurement process, is also essential.

My involvement with an RAF reserve squadron has taught me that the Reserve Forces have a major part to play in increasing total military output for less money. Today, 50% of the RAF reserves routine output is in support of the front line and operations. Against the background of today’s more flexible employment culture and the integration of the Reserve Forces into the regular forces, could we not aim to achieve a ratio of regulars to reserves of 1:1? The United States achieved that long ago, and other NATO allies such as France, Germany and Sweden are set on a pathway to the exponential growth of their reserve forces.

Can the Minister and the noble Lord, Lord Robertson, confirm that the Government’s declared intention to reset our relationship with the EU does not mean that we will pull back at all from the tilt to the Indo-Pacific, which recognises our ability to punch above our weight in hard and soft power, working with our allies across the world? Japan remembers with affection the Anglo-Japanese alliance of 1902-22. The UK’s bilateral relationship with Japan has grown progressively closer in recent years. In particular, defence and security initiatives have strengthened the relationship, forming part of a more integrated defence approach across the Euro-Atlantic and Indo-Pacific regions. This strengthening has been especially appreciated by Japan against the background of growing uncertainty over the reliability of the United States’ security umbrella and the deteriorating geostrategic situation in east Asia.

The Japan-UK reciprocal access agreement of January 2023 and the Hiroshima accord of May 2023 committed both nations to the global combat air programme—GCAP—together with Italy as the third partner. Japan and the UK have therefore joined forces and pooled their technologies, together with Italy’s, to develop a sixth-generation fighter jet—in the nick of time as far as Japan is concerned, because the life of its existing F-2 fighter aircraft cannot be extended beyond 2035. Mutual expectations among the three industrial partners are very high. The failure of any of the three of them to honour commitments to complete this project on time would have serious consequences for the other partners.

For the UK, the role envisaged in the GCAP could create 21,000 jobs each year and contribute £26.2 billion to the economy by 2050, but GCAP is not mentioned at all in the terms of reference for the SDR; nor is Japan. The UK, US and Australian Defence Ministers said in May 2024 that they would consider expanding AUKUS pillar 2 to include Japan and other countries. The parameters of the SDR merely note that it will

“identify ways to maintain the UK’s defence ties to the Indo Pacific region, the Gulf and the Middle East”.

That statement falls short of the expectations of our Japanese friends. I believe also that other friendly nations in the Indo-Pacific region, including Australia, South Korea, and New Zealand, now share Japan’s concerns. Many of our Japanese friends think and believe that we have entered the age of the second Anglo-Japanese alliance. I look forward to the Minister’s speech, which I hope will provide some reassurance.

Ministry of Defence: Expenditure

Viscount Trenchard Excerpts

Thursday 25th July 2024 Lords Chamber

[Lord Coaker (Lab)]

I thank the noble Lord for his question and for all the work he does in his position outside this House. He makes an important point. For me, it is not whether it is a small capital project or a large capital project; the important point is how it contributes to the lethality of our forces and how it contributes to us defending not only our country but freedom and democracy across the world. Whether it is a small project, a medium-sized project or a large project, its utility should be decided on that basis. The noble Lord makes a very important point, and I will make sure it is taken into consideration.

[Viscount Trenchard (Con)]

My Lords, the change of Government has already resulted in a delay to the announcement of the location of the joint government headquarters for the trilateral British, Japanese and Italian fighter jet project, GCAP. Is it true that this project is now dependent on the result of the strategic defence review, or has the Minister been able to give reassurance to the visitors at the Farnborough airshow this week, including the Japanese Defence Minister, that it will go ahead regardless?

[Lord Coaker (Lab)]

The noble Lord will have heard what I said. Not only did I give reassurance to Italy and Japan and our defence companies at Farnborough, I hosted a reception for all those partners last night in your Lordships’ House. It was very well received. We reassured people that work continues on that project, alongside the fact that the noble Lord, Lord Robertson, is conducting a review that will look at the defence programme across the piece. They were very pleased with what I had to say, and I spent my time reassuring them, here in your Lordships’ House.

King’s Speech

Viscount Trenchard Excerpts

Thursday 25th July 2024 Lords Chamber

[Viscount Trenchard (Con)]

My Lords, I congratulate the noble Baroness, Lady Anderson of Stoke-on-Trent, and the noble Lord, Lord Coaker, on their appointments, and the noble Baroness, Lady Anderson, on her impressive opening speech. I feel an affinity with the noble Baroness, because we both hold honorary commissions in the Reserve Forces.

I declare my interests as a consultant to Japan Bank for International Cooperation and an adviser to Mitsubishi Heavy Industries Ltd. I am sorry that the recent and most successful state visit to the United Kingdom by their Majesties, the Emperor and Empress of Japan, took place after the Dissolution of the last Parliament, because neither this House nor another place had an opportunity to debate the excellent state of relations between Japan and the United Kingdom. That would have been an appropriate way for your Lordships’ House to mark the visit and note how the already excellent bilateral relationship has in recent years expanded to cover an even wider range of interaction between the two island countries, which have many similar attributes as well as some lingering but interesting cultural differences, as those who have watched “Lost in Translation” will appreciate.

The only reference to trade in the gracious Speech was the commitment to improve our trade and investment relationship with the EU. Will the Minister confirm that the Government remain committed to the UK’s tilt to the Indo-Pacific and that any changes they may seek to the TCA will not have an impact on our membership of the CPTPP, for which Japan and Australia were the prime supporters among the 11 other members? Our accession to the CPTPP showed that our commitment to and involvement in east Asia is real. It was greatly welcomed by Japan, not least for geostrategic reasons.

It is welcome that the Defence Secretary, on his recent visit to Sheffield Forgemasters with Richard Marles, the Australian Defence Minister, confirmed the Government’s staunch commitment to the AUKUS partnership and the jobs and growth that it can deliver for Britain. The previous Defence Secretary announced on 8 April with his American and Australian counterparts:

“Recognising Japan’s strengths and its close bilateral defense partnerships with all three countries we are considering cooperation with Japan on AUKUS Pillar II advanced capability projects”.


Do the Government remain committed to full co-operation in this important programme? I would like to know their view on this, although I expect the noble Lord will say that this is also subject to the SDR.

The Foreign Secretary has made it clear that he seeks a new bilateral defence and security treaty with the EU. I was privileged to be a member of the European Affairs Committee, which recently published two reports relevant to this subject, the first in April 2023 on the future EU-UK relationship, under the chairmanship of the noble Earl, Lord Kinnoull, and the second at the end of January this year on the effect of Russia’s invasion of Ukraine on the EU-UK relationship, under the chairmanship of the noble Lord, Lord Ricketts. The first noted that most of our witnesses considered that UK-EU co-operation in response to Russia’s invasion of Ukraine had been positive—I think the noble and gallant Lord, Lord Stirrup, said “excellent”. Our second report recommended that we should continue to consider seeking third-country participation in PESCO projects on a case-by-case basis, where it is in the UK’s interests. It also concluded that NATO remains the leading organisation for defending Europe and setting standards to facilitate military interoperability between European allies.

The decision to commission a strategic defence review, pending the completion of which there can be no certainty about the future of any military project, has created a degree of uncertainty for Japan and other friendly countries in east Asia. As has been noted, we have entered into a trilateral treaty with Japan and Italy to develop a sixth-generation fighter jet—the GCAP. Although the Minister repeated his commitment to the project today, the Armed Forces Minister has declined to give such a firm commitment. I strongly welcome the appointment of the noble Lord, Lord Robertson of Port Ellen, to lead the SDR. Does the Minister expect it to specify a clear timeline for meeting the 2.5% commitment—a share of our national product which I expect will soon prove to be rather too low?