Middle East: Economic Update

Debate between Viscount Trenchard and Lord Livermore

Thursday 26th March 2026 Lords Chamber

[Lord Livermore (Lab)]

I think I have set out very clearly the pace at which we are increasing and will increase defence spending. From 2027, we will increase defence spending to 2.6% of GDP, and we are increasing spending on defence by £5 billion in this year alone. Our ambition is to reach 3% in the next Parliament, when fiscal and economic conditions allow.

[Viscount Trenchard (Con)]

My Lords, following on from the noble Baroness’s question about grid capacity and upgrading the grid, does the Minister not agree that the more small nuclear we can introduce instead of intermittent renewable sources—such as onshore and offshore wind—the better, because it is firm baseload power? Also, it reduces the need to upgrade the grid because, for example, high-temperature gas-cooled reactors—50-megawatt reactors—can be placed over the fence, alongside data centres or industrial clusters. Our Japanese friends have almost given up on us and are now considering working with different partners on commercialising their high-temperature gas-cooled reactor technology, which was originally a British invention. When will the Government confirm their commitment to early deployment of this very effective and useful technology?

[Lord Livermore (Lab)]

I am grateful to the noble Viscount, who clearly has a great deal of expertise in this matter. I agree with everything he said, certainly in the first part of his question. SMRs and AMRs being deployed in the UK will form an incredibly important part of our energy mix. We have set out and published a framework so that we can see more private sector investment in exactly those technologies. As he says, AMRs in particular can provide very high heat to decarbonise a lot of our industry, which is incredibly important. They do not need to connect to the grid, so they do not use up grid connections. That is exactly the kind of technology that we would like to see deployed more. As I said, we have published a framework so that we can see more private investment in exactly those technologies.