Defence Spending

Baroness Stuart of Edgbaston Excerpts

Thursday 12th March 2015 Commons Chamber

[Mr Baron]

I agree that we inherited a financial shambles, as I have said many times before, but if we are prepared to ring-fence the international aid budget, it becomes a question of priorities. My point is that we need to spend more on defence and we need to reflect what is happening on the international stage: we are failing to do that.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

It may be worth reflecting on the fact that in 2010 we spent 2.5% of GDP on defence, so considerable cuts have already been made. The 2% is a marker.

[Mr Baron]

I made the point earlier that defence spending as a percentage of GDP has been falling under this Government, but my message is not just to my own Government. There is a political disconnect between the extent of our commitments and the lack of funding that is not being recognised across the political divide. I do not hear either of the main political parties saying that we should scale back our ambitions in the world, but nor has either party made it clear that it is committed to at least 2% in the future. I personally would like to see much more than that, but everyone can see the terms of the motion.

The reservist plan has been a disaster, in my opinion, resulting in unacceptable capability gaps in the short term and false economies in the long term, as we throw yet more money at it to try to make it work. Matters are not much better in the Royal Navy, which has been reduced to a mere 19 surface ships, although a recent SDSR suggested that 30 would be more appropriate. In addition to problems with the new aircraft carrier, the lack of a replacement for Nimrod means that we are in the ridiculous situation of having no maritime patrol aircraft. We have to go cap in hand to the Americans and the French to police our waters against potentially hostile submarines. That is a ridiculous state of affairs for a country of our standing.

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[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

We have heard three excellent speeches, and I found very little to disagree with in any of them, but perhaps I did disagree with the hon. Member for Basildon and Billericay (Mr Baron) when he spoke of our “misguided” interventions. Surely it was not our interventions but the way in which we carried them through that was misguided. We generally did not carry them through with enough stamina and enough commitment to the action that we needed to take.

I pay tribute to my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr Havard), who serves on the Defence Committee and who has provided us with some extraordinary insights. We have occasionally wished that we could edit some of what he said, or make it a little quicker—we ribbed him about that mercilessly at times—but I think that the whole Committee learned from his long-term, strategic way of looking at things and pulling them together.

It might have been beneficial for the entire defence team to listen to today’s debate, for, as I look around the Chamber, it seems to me that it will turn out to be a debate worth listening to. The same applied to our last debate on defence spending: every speech contributed something. Even if Ministers take in what is said by Members on both sides of the House, they do not make it clear that they are taking any notice of some of the friendly advice that is given to them. A classic example arose during Prime Minister’s Question Time, when I raised the subject of the 2% target. It was the Prime Minister who, at the Wales summit, lectured other countries and told them that they should step up to the plate. I suggested that he might just feel a tiny bit embarrassed, but all that he could come back with was some reference to the Scottish National party. Defence is not a party political issue; it is an issue for which the House has a collective responsibility. It seems that Back-Bench debates are required to bring Members together to discuss an issue that the Government ought to encourage us to talk about, but do so very rarely.

Let me return to the question of why the 2% matters. We all agree that it is an arbitrary figure, but it is part of an international commitment: it is part of article 5. Article 5 contains no mandate for a particular kind of response, but if we continue like this, we shall have no response except sanctions. We shall not be able to respond militarily except via the Americans. It is deeply irresponsible for the mainland European NATO members to keep cutting defence spending and keep telling their publics that, while their aspirations have not changed, everything will be done through much smarter methods and in co-operation, so they will continue to deliver more by investing less.

A few years ago, someone in the Pentagon described European countries as “no-good, crummy allies”. If we continue on our present trajectory, we shall join the ranks of no-good, crummy allies, and I do not want to see that day. The hon. Member for Basildon and Billericay spoke of national and international interests, to which I would add “national and international responsibilities”. If we wish to be a significant player in the world and to fulfil those international interests, we must possess not only capacity, but reliability and steadiness.

I do not want to repeat the speech that I made last week. My last point concerns political leadership. It is true that defence is not a vote-winner. I would not like to live in a country where people demonstrate in the streets, demanding more weapons and military action. It is in the nature of our people to want peace, but the leaders must show that they are responsive to the needs of the defence of the realm, and are conscious of their international responsibilities.

[John Glen (Salisbury) (Con)]

The hon. Lady is making some characteristically wise observations, and I think we all agree about the 2%. Surely, however, leadership is not just about calling on all NATO members to match that 2%, but about calling for effective use of that money. Many people feel that if the 2% is not spent wisely, it is not really the end of the story. We need to be sure that it is being spent properly.

[Ms Stuart]

The hon. Gentleman is right: it must be spent properly. The 2% commitment sends signals, and gives the services and the supply chain certainly, about what is going to happen. It is no good trying to massage the figures and suddenly include war pensions in order to arrive at the 2% figure, because that would render it absolutely meaningless.

I said that I would be brief. Let me end by saying that the 2% is part of our North Atlantic treaty commitment, because part of our commitment is to a capacity that will enable us to respond to an article 5 threat. It is up to all parties in the House—and, in particular, Front Benchers—to show leadership, so that we can bring our voters with us in relation to our commitment. Without leadership, that simply will not happen.

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[Mr Dunne]

I thank my right hon. Friend for his advice. It is the case that vast majority of the headcount reductions across the Ministry of Defence have taken place within the bureaucracy—as my right hon. Friend calls it—of civil service support to the armed forces.

The lesson here is that it is no use having a budget of £34 billion if it is not spent efficiently. Driving efficiency savings out of our budget is an important part of what we have achieved, which is to get more capability for our armed forces out of the money that we spend on defence.

In 2010, the defence budget was the second largest in NATO, and the largest in the EU. In 2015, it remains the second largest in NATO and, by some margin, the largest in the EU. Using NATO’s figures, the UK defence budget is now some $8 billion larger than the next largest EU budget, which is that of France. That gives the UK one of the most effective and deployable armed forces in the world. This very day, the UK has more than 4,000 military personnel deployed overseas on 20 key operations, in 24 countries worldwide.

Our funding also enables the UK to be and remain the most reliable partner to the US in NATO. Since August, we have been the US’s largest partner in the coalition air strikes against ISIL, conducting more than 10% of air strikes. A key capability in the effort, for example, has been the result of investment in the Brimstone missile, the most advanced precision missile system in the world. We are now working to integrate Brimstone on to other platforms such as Typhoon. This is just a single capability within our £163 billion costed, funded, affordable equipment plan, which in turn enables the UK to be one of only four NATO countries consistently to meet the key metric, spending 20% of defence expenditure on major new capabilities.

The clarity of this plan allows us to invest in next-generation capability. I shall give a few brief examples. Our new aircraft carriers will deliver a step change in capability. They are half as long and weigh almost three times as much as the previous Invincible class, yet will deliver their cutting-edge capability with the same size crew. They will have the next-generation F35 aircraft flying from them, and we have ordered four aircraft to form part of the operational squadron in addition to the four currently in test and evaluation in the United States. That platform will be far more capable than the Harrier that they replace. As the Prime Minister confirmed again yesterday, the Conservative party is committed to maintaining a continuous at-sea deterrent and will build a new fleet of ballistic missile submarines, with the final investment decision due in 2016, of which I am sure my hon. Friend the Member for New Forest East (Dr Lewis) will approve.

[Ms Gisela Stuart]

Yesterday I suggested to the Prime Minister that he might be just a tad embarrassed by the fact that less than a year ago he lectured other NATO countries about not reaching 2%, yet we were falling below it. He failed to answer that question. Would the Minister like to add anything?

[Mr Dunne]

I will come on to the issue of the 2% in a moment. We are not falling below it and we do not intend to do so in the period of the spending review. We have also presided over the modernisation of our air mobility fleet, which is now the envy of the world. Many of our NATO allies rely on our capability during operations. The Voyager air-to-air refuelling capability is being used today across Iraq by a number of our allies, not only the RAF. We are transforming our helicopter fleets. As I saw earlier this morning, we have invested £6 billion over the past four years in state-of-the-art lift, attack and surveillance capability, on time, on budget, providing flexibility so that more can be done with less.

For the Army, last year we placed the Scout vehicle contract—the biggest single order for a UK armoured vehicle in 30 years. It will provide the Army with its first fully digitised armoured fighting vehicle to give it the kind of manoeuvrability that the Chairman of the Select Committee and other hon. Members have called for. I can also confirm to my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff), who did such a good job in laying the foundations for this transformation work, that we remain committed to spending at least 1.2% of the defence budget on defence science and technology. We achieved more than that last year and will do so this year. This will include more investment in disruptive areas of technology such as directed energy weapons and others, where we have committed to shift more of the balance of science and technology investment as we move into a contingent posture.

The Government’s position on the motion before the House this afternoon is clear. We will meet the 2% commitment in this financial year. We will meet it in the next. As we have been consistent, after the general election this will be a matter for the next spending review. The Prime Minister has been clear. We are committed to a 1% year-on-year real-terms increase in spending on defence equipment for the next spending review period. He has also been clear that the size of our regular armed services will remain at the level it is now, with a continuing commitment to grow the reserves to 35,000. It is not just about 2% of GDP; it is about how you spend it and what you are prepared to do with it.

The results of our reform programme speak for themselves. Four and a half years ago, we were in chaos. Today, we have earned a strong reputation across Whitehall for competence and have transformed defence capability for the better. The Treasury, even, has granted the Ministry of Defence the largest delegated budget of any Department. So we have replaced Labour’s chaos with Conservative competence. Where there was a deficit, now there is a balanced budget; where there were cost overruns, now there are cost savings; and where equipment programmes were late and over-budget, now they are overwhelmingly on time. The MOD is on far firmer foundations as we head into the next SDSR and spending review.