Defence Spending Priorities: NATO Summit

Baroness Goldie Excerpts

Wednesday 6th July 2022 Lords Chamber

[Lord West of Spithead]

To ask Her Majesty’s Government what changes to defence spending priorities they will make as a result from the outcome of the NATO summit in June.

[The Minister of State, Ministry of Defence (Baroness Goldie) (Con)]

My Lords, although the next spending review will determine the exact changes to defence spending priorities, as the Prime Minister stated at the NATO summit last week, we need to invest for the long term in vital capabilities such as future combat air, while simultaneously adapting to a more dangerous and competitive world. The logical conclusion of the investments we propose to embark on and of these decisions is 2.5% of GDP on defence by the end of the decade.

[Lord West of Spithead (Lab)]

My Lords, I must first say that I am very impressed that the Minister is so on top of her brief; she read it just 20 seconds ago. The NATO summit clearly identified Russia as a clear and present danger. There is a danger of a world war at very short notice. The summit identified a need to spend money on defence. We need to spend that money today. Does the Minister not agree that we need to spend now? It is no good waiting for the end of this spending review. We know that we will not have a fully stocked armoured division available to fight peer-on-peer until the 2030s. We know that our number of frigates will keep falling and not come up again until the 2030s. We might well have had two wars by then. We need to spend now. Does she agree?

[Baroness Goldie (Con)]

To reassure the noble Lord, I tell him that the pack was read, digested and tabbed, but unfortunately it was not where I was. I was very pleased to be reunited with it. What we have seen with recent events is a confirmation of what was identified in the integrated review and the defence Command Paper—that Russia is the current threat. Therefore, the assessment in these papers holds true. However, we are not complacent. We recognise that the context in which we are operating is shifting and we are watching and analysing the situation. We will make adjustments where appropriate, but we should wait in some cases to see what unfolds.

[Lord Lancaster of Kimbolton (Con)]

But the devil is in the detail, my Lords. Although I welcome 2.5% by 2030, can my noble friend perhaps—

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[Noble Lords]

Oh!

[Baroness Goldie (Con)]

I thought someone was going to answer the question for me; all offers of help gratefully received. My noble friend identifies a significant issue that was the subject of extensive discussion at the recent NATO summit. The MoD continues to understand the implications of the war in Ukraine for the readiness and resilience of our Armed Forces, for the health of our industrial base and for our review of our stocks of weapons and munitions, because that forms a key element of the analysis we carry out. All parties to NATO are doing similar things, but I reassure my noble friend that this department remains fully engaged with industry, allies and partners to ensure that all equipment and munitions granted in kind are replaced as expeditiously as possible.

[Lord Campbell of Pittenweem (LD)]

My Lords, in Madrid, NATO agreed to create a force of 300,000 troops to be kept on high alert in order to meet the Russian threat. How can the United Kingdom make a meaningful contribution to that force without increasing the British Army?

[Baroness Goldie (Con)]

As my noble friend Lord Howe explained so eloquently last week in response to a Question specifically about this, we have explained our approach. We are very clear that the Army will be more agile. It will have a greater speed of response. It will be remodelled around brigade combat teams, which means more self-sufficient tactical units with the ability to integrate the full range of capabilities at the lowest possible level. In addition, every part of the Army Reserve will have a clear war-fighting role and will stand ready to fight as part of the whole force in time of war.

[Baroness Falkner of Margravine (CB)]

I first apologise to the Minister for my enthusiastic earlier attempt at intervention. I assure her that the last thing I would seek to do at the moment is to expect to speak on behalf of Her Majesty’s Government. Turning to the substantive question from the noble Lord, Lord West, will she accept that in a declining or stagflating economy a GDP target several years out is almost meaningless once inflation is taken account of? Will they at least attempt to set an immediate target for where they expect to get to within a reasonable—I should say “prompt”—period in terms of real funding?

[Baroness Goldie (Con)]

The Prime Minister has made it clear that the investments we propose to embark on, such as AUKUS and FCAS, will mean that defence spending will reach 2.5% of GDP by the end of the decade. It is currently projected to reach 2.3% of GDP this year. We constantly assess the threat and our ability to respond to it, which is a responsible way to proceed.

[Lord Browne of Ladyton (Lab)]

My Lords, on Monday in the other place, while making a Statement, the Prime Minister was on more than one occasion asked a variant of the excellent question that the noble Lord, Lord Campbell of Pittenweem, asked. He never once answered the question but twice prayed in aid what he called the “gigantic” commitment we are making to the AUKUS agreement and how it will increase defence spending very considerably, taking it over the target of 2.5%—those are not the exact words but that is what he said. On 16 December when he made the initial Statement about AUKUS he said nothing about predicted costs. On the contrary, he said that AUKUS came with lucrative defence and security opportunities. There is no information in the public domain on the predicted cost of AUKUS so where can I find the evidence of the gigantic commitment we seem to have made, that only the Prime Minister seems to be aware of?

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[Baroness Goldie (Con)]

As the noble Lord is aware, AUKUS is subject to an 18-month scoping period, so Her Majesty’s Government cannot prejudge the outcome of that period. Similarly, in the advanced capabilities space, all working groups are currently in the initial phases. As that proceeds, we will have a clearer picture of what the UK contribution can be. Much the same can be said of FCAS. These are very significant projects.

[Lord Trefgarne (Con)]

My Lords, are there plans to deploy any of our existing naval forces to the Black Sea to facilitate some of the export of the large quantities of grain which at present are unable to move?

[Baroness Goldie (Con)]

My noble friend refers to an important issue: how we transport that grain, if possible. Discussions are taking place among the different partner countries as to what solutions there might be. There are no Royal Navy craft in the Black Sea. My noble friend will be aware that the Montreux convention governs maritime activity there, and that has been deployed by Turkey.

[Lord Coaker (Lab)]

My Lords, was not the most welcome outcome of the Madrid summit NATO’s agreement to admit Finland and Sweden? Far from weakening NATO, Putin’s actions have strengthened it. Alongside that, is it not clear that we need to review the cuts to tank numbers, cuts to C130 transport planes and cuts of 10,000 troops? Is the chair of the Defence Select Committee not right when he says that 2.5% of GDP on defence spending by the end of the decade is too little, too late?

[Baroness Goldie (Con)]

As the noble Lord is aware, people will have varying views on the appropriate percentage of GDP to spend on defence. We have laid down a clearly structured plan based on the integrated review and the defence Command Paper, and we regularly make available progress reports—for example, our annual review of the equipment plan—on where we are in the delivery of all that. We constantly assess need and identify and assess threat. We try to make sure that the two are aligned and that we meet the one with the other, and that is a sensible way to proceed.

[Baroness Smith of Newnham (LD)]

My Lords, there is a theme on all sides of your Lordships’ House that perhaps 2.5% is insufficient—or at least can be overtaken by inflation, which is looking to move to double digits, and the exchange rate, which has gone down yet again today. What work are Her Majesty’s Government doing to ensure that the 2.5%, or whatever is spent on defence, will be adequate for everything the Government claim they will achieve?

[Baroness Goldie (Con)]

As I have indicated to the Chamber, there is a regular assessment by the MoD of both the threat we have to meet and the means by which we meet it. For example, the equipment plan—a massive plan—is kept under constant review to ensure that it is delivering the capabilities required to let us deliver our strategic outcomes. Major changes are normally undertaken as part of a formal government-led review process, but the MoD conducts an annual review to ensure that capabilities are not just being delivered but are still the right ones to meet the evolving threat.