Armed Forces (Pensions and Benefits)

Debate between Gemma Doyle and Nick Harvey

Tuesday 8th March 2011 Westminster Hall

[The Minister for the Armed Forces (Nick Harvey)]

I commend the hon. Member for Liverpool, Walton (Steve Rotheram) on initiating this debate on the effect on the armed forces of Government changes to pensions and benefits, and I acknowledge that the subject is profoundly important to many people.

Our armed forces are deployed to most demanding areas of conflict and we have a duty, not only as a Government but as a nation, to support and look after them, to care for the injured and the bereaved. That is common ground for all hon. Members. As the House knows, the priority for the Government is to bring the national finances under control by reducing the deficit, which inevitably means reducing public expenditure. That means that we have to take difficult and sometimes very unpalatable decisions in all areas of spending, including defence. Because of the priority we place on security, the defence budget is making a more modest contribution to deficit reduction relative to almost all other Departments.

However, in the comprehensive spending review and the strategic defence and security review, we have still had to take difficult decisions that have repercussions for some members of the armed forces and their families. I repeat that many of those decisions have been unpalatable. Nobody in the coalition came into politics to make cuts to the armed forces or to eliminate capabilities in our military power, but that is what we have had to do.

[Gemma Doyle]

Will the Minister confirm that the decisions he refers to are financial, not strategic?

[Nick Harvey]

I am coming to that. We have to acknowledge three things. First, the scale of the deficit is so enormous that £1 in every £4 of public expenditure is being borrowed, and the interest alone on the debt this year is greater than the entire defence budget, including the proportion being paid by the Treasury for operations in Afghanistan. That is how immense the overall deficit black hole is. That is compounded in the area of defence by the situation we inherited, where the defence budget was lagging behind the defence forward programme over the 10-year planning period by £38 billion. That is the gap between the programme that we inherited and the existing budget, set at a flat real basis, for the 10-year planning period. That is over and on top of the general deficit picture that we inherited. There is the general picture and the specific defence picture.

The third element, which I do not think was acknowledged adequately by the hon. Member for Liverpool, Walton, is that before there ever was an economic downturn, before the banking crisis hit, before the deficit became part of the political currency, there was already a problem with public service pensions, which the previous Government had acknowledged and was beginning to address, and which was going to require pretty drastic action sooner or later, irrespective of the nation’s finances plunging as they did. Before any of that started, there was already a serious problem with the affordability of public service pensions. We have to acknowledge all three factors as the backcloth to the decisions that have subsequently been taken.

[Gemma Doyle]

Will the Minister give an example of a time in the previous Parliament when either his or the Conservative party called for less defence spending?

[Nick Harvey]

Certainly not. We would have liked to have seen more defence spending. We would still like to see that now. The fact is that defence figures, for obvious security reasons, are not exposed to the same degree of parliamentary scrutiny as those of other Departments, and with the long lead time of many defence items, commitments stretch further into the future than they do in many other Departments. Although we were aware from Bernard Gray’s report on procurement that there were some pretty serious financial difficulties inside the Ministry of Defence, it was not until we got in and saw the full scale of it that we realised how drastic the defence budget’s problems were.