Defence Spending

Lord Spellar Excerpts

Tuesday 16th July 2019 Westminster Hall

[Anne-Marie Trevelyan]

The hon. Gentleman pre-empts some of what I am going to talk about. He is absolutely right.

Our doctors and nurses tell us directly and bluntly if the funding systems for the NHS are not working properly so we can do something about it and advocate for them. However, that is not an option for our defence chiefs, so it is hard for us to know whether their resources would be sustainable and resilient if there were a major crisis. The question is not only whether enough funding is going into our defences but whether we are spending it correctly—a narrative that ran successfully after the strategic defence and security review in 2010, when the country was in dire financial straits and the former Member for Whitney had the unenviable challenge of trying to put it back on to a stable financial footing. SDSR ’10 declared—conveniently, perhaps, to match the financial crisis—that the Ministry of Defence, like other Departments, had to find efficiencies. There is no question but that that was the right thing to do.

[John Spellar (Warley) (Lab)]

First, I resent the use of the word “efficiencies”. Basically, that is Treasury speak for cuts, and it would not face up to that. Secondly, the hon. Lady is clearly under a misapprehension: the country was on a very steady path to reducing the deficit. Owing to the crash-and-burn tactics of Mr George Osborne, we went into a recession, which lessened the revenue coming in, deepened the crisis and worsened the deficit.

[Anne-Marie Trevelyan]

As ever, the right hon. Gentleman is a great defender of his party’s financial position. I would not choose to pick a fight with him, because he is a staunch defender of all matters defence.

--- Later in debate ---

[Anne-Marie Trevelyan]

The hon. Gentleman’s point is well made. I will refer to submarines later. We need to challenge the Department continually on whether Committees such as the Defence Committee and the Public Accounts Committee, on which I sit, have the tools to look pre-emptively at the risks of those sorts of decisions.

There is also a mantra that technology is changing how we do everything and that it will, as if by magic, solve all challenges. It is implied that it will make everything cheaper, and that we can stop doing things the old way because there will be a whizzy, less manpower-hungry solution. Although it is true that world-leading UK defence businesses are creating extraordinary cutting-edge kit, that is not the only tool for solving our defence challenges. From Florence Nightingale and her medical advances to Alan Turing, the urgent need to gain advantage over the enemy has always brought out the brilliance of our citizens’ inventive genes. Defence has always been at the forefront of innovation because defence in action stretches human ingenuity under the insane pressures of war.

[John Spellar]

I congratulate the hon. Lady on her excellent speech. However, for industry to be able to respond, there needs to be an industry. That requires the British armed forces and the Treasury to put orders into British factories and British yards, rather than applying a model of international competition that takes no account of the prosperity agenda and no account of the long-term sustainability of the defence industry and its ability to innovate.

[Anne-Marie Trevelyan]

That question of sovereignty and the prosperity agenda—the third pillar of defence’s remit—is one we need to continue to challenge. As a Brexiteer, I am happy to say that I think we will have more authority to speak in how we choose to do that—

[John Spellar]

That’s not true.

[Anne-Marie Trevelyan]

Well, that is my opinion. Leaving the EU will give us more flexibility to bring the various parties together and will enable UK businesses, which are world leading, to make their case as effectively as possible.

[John Spellar]

The hon. Lady should not allow herself to be misled by Treasury-speak. In both European regulations and the Treasury Green Book, the Ministry of Defence has all the tools it needs to support British industry. The problem is a lack of will. It does not help to blame the EU. The problems are in Whitehall, not in Brussels.

[Anne-Marie Trevelyan]

I thank the right hon. Gentleman. The Minister will have heard his perspective.

One of the key issues for defence is its people, who are flexible, selfless, uncomplaining and serve willingly—indeed, alongside the Minister, who puts his life on the line to serve his country. Equipment changes constantly—if it did not, we would still be sending our Navy to sea under sail—but the quality of our people is always critical. We spend more than a third of our defence budget on people. I say that that is an investment, since they are highly trained and we invest in their training throughout their careers, in a way almost no other employer does. However, we classify them as a cost, so departmental behaviour fails to look after them—our human capital—as assets.

We would not fail to repaint a warship—clearly, that would make her less seaworthy or less capable of dealing with the scars of battle—yet we are perfectly content to fail to invest in the personnel who serve, by not looking after their families and by failing to demonstrate what the armed forces covenant should mean: that if someone has served or is serving, this country genuinely thinks they and their family should not suffer disadvantage. It is imperative that we change the financial models the MOD is allowed to use so that our human capital can be classified as an asset. Service chiefs cannot determine how to reward their personnel, because they are not allowed to use their budgets freely to maximise the benefit to their people and their service. For small change—in both senses of the word—the behavioural changes achieved by flexibility would be substantial and immediate.

I believe the reason change is not happening is that the Department and the Treasury fail to understand the nature of military preparedness, and do not seem to question our resilience if we need to put our military under pressure. Although we put kit that is small, plentiful, cheap and speedy to resource on to the soldier, we put highly skilled men and women, who take years to train, into equipment in the Royal Navy and the RAF that takes years to build. A modern warship or fast jet cannot be whipped up in a few months. It is at the mercy of international supply chains, the risks of which, as the right hon. Member for Warley (John Spellar) mentioned, perhaps are not properly understood.

Importantly, that equipment would take a long time to replace if lost. Although bullets for small arms can be produced at speed if necessary, the missiles sustaining our warships and Air Force cannot be churned through a production line at speed if they are suddenly required. Training a submarine commanding officer or fast jet pilot takes years of investment—it takes time. Too often, it feels like the Department’s financial models simply refuse to acknowledge that and fail to understand the human capital investment that is being made, leaving us with huge risk from poorly assessed decisions.

We must consider the key tenets of successful defence and assess whether we are investing enough to sustain them. The first is deterrence. Deterrence works. Nuclear is the ultimate deterrent, but we must never forget that conventional deterrence has greater utility and that strong power generates respect. Let us consider for a moment our nuclear deterrent in its 50th year in our Royal Navy. Our continuous at-sea deterrent is an extraordinary feat. I always refer to it as our best weapon of peace, because the threat of nuclear war has ensured that we have had no more global wars. Humanity understands genuine existential threat, and the CASD is the embodiment of the UK and USA’s global policing, which reminds any rogue state why using a nuclear weapon would be a bad decision. But do we invest properly in our submarine service?