Fiscal Policy: Defence Spending

Lindsay Hoyle Excerpts

Monday 27th January 2025 Commons Chamber

[Luke Pollard]

I agree with the hon. Gentleman’s words about Holocaust Memorial Day. His Majesty the King has been in Auschwitz for the 80th anniversary, and he spoke for the nation when he said that we will remember this evil long after the survivors of the Holocaust have passed.

I have set out clearly that, in the spring, we will lay out a path to spending 2.5% of GDP on defence. We will also publish a strategic defence review, setting out what we will spend the money on and how we will respond to emerging threats. As the hon. Gentleman will know from the Defence Secretary’s statement last week, we will make it absolutely clear to those who threaten us that we will use the formidable capabilities available to us to defend the UK and our allies.

We inherited a situation in which, during their entire time in power, not a single Conservative Government spent 2.5% of GDP on defence. The last time that 2.5% of GDP was spent on defence was under the last Labour Government. We have inherited falling morale; a retention and recruitment crisis; service personnel living in mouldy, broken homes; and a hollowed-out and underfunded military. That is what the SDR will seek to fix, and I hope that the hon. Gentleman will be able to give us his full support.

Having listened to last week’s debate, the hon. Gentleman will know that those who die on active service are exempt from the inheritance tax provisions. He will also know that the Defence Secretary has uplifted CEA support to 90% for those who privately educate their children while serving in the military. We will continue to support our armed forces, renewing the contract between the nation and those who serve. We will publish the defence review in the spring, when we will also set out our path to spending 2.5%.

[Mr Speaker]

I call the Chair of the Defence Committee.

[Mr Tanmanjeet Singh Dhesi (Slough) (Lab)]

We live in an increasingly volatile world, so I thank the Minister for his clarification on defence spending. Surely the cost of fighting a war, notwithstanding the human cost, is significantly higher than that of having a credible deterrent force. The Prime Minister recently told me at the Liaison Committee that the strategic defence review has to be completed before the path to 2.5% can be plotted, so why have there been discussions about the timeline for that path before the SDR has been published?

[Luke Pollard]

We have said that we will publish the strategic defence review in the spring, and we will also set out a path to spending 2.5% of GDP on defence in the spring. I do not recognise the publication timeline suggested by my hon. Friend, but he is right that deterring a war is cheaper than fighting one. That is why we are continuing to support our allies in Ukraine, and making sure that we have a NATO-first defence policy—to deter aggression facing the United Kingdom and our allies, and, if necessary, to defeat it with formidable capabilities.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Helen Maguire (Epsom and Ewell) (LD)]

The Government’s commitment to spending 2.5% of GDP on defence has been shrouded in delay and uncertainty. At a time when Europe faces its gravest security crisis in decades, this is unacceptable. Promises without a clear path are hollow, and the Government should commit to setting out by Easter a detailed and credible plan for reaching 2.5%.

We must also make the right spending decisions, and the House of Lords International Relations and Defence Committee has raised concerns about the capability of the British Army. What plans does the Minister have to reverse the previous Conservative Government’s cuts to the Army? He mentioned retention, which is another critical issue. Improving the living conditions of our armed forces must be a priority if we are to attract and keep the talent we need.

Finally, the ongoing problems of inefficient defence procurement undermine our readiness, so what is the Minister doing to tackle those long-standing problems? The Government must stop dragging their heels, set out the pathway to 2.5% and end the uncertainty.

[Luke Pollard]

I have a lot of time for the hon. Lady, but we have been very clear and consistent that we will set out a path to spending 2.5% of GDP on defence in the spring. I remind her that when her party was in government, instead of increasing defence spending by £3 billion, as Labour did, the Liberal Democrats’ and the Conservatives’ first Budget cut defence spending by £2 billion, and cut it by 20% across the Parliament in which her party was in power. I support the hon. Lady in wanting a better deal for our forces, but I remind her to look in the rear-view mirror occasionally.

[Mr Speaker]

Order. While we are talking about mirrors, can the hon. Gentleman look at me occasionally, so he is not just staring one way?

[Derek Twigg (Widnes and Halewood) (Lab)]

It is interesting that Members on the Opposition Front Bench seem to have forgotten that when they left office, they left us with the smallest Army since Napoleonic times, a lack of ships and aeroplanes, some of the poorest equipment and many problems with procurement. It is important that we keep to the timetable on the SDR, but given the rumours we are hearing and the stories in the press, will the Minister provide an assurance that he will keep this House fully informed on progress on the SDR, not provide that information through the press?

--- Later in debate ---

[Luke Pollard]

I thank the hon. Gentleman for his question, and I support the work of the private sector businesses that do so much to support our armed forces. The needs of our armed forces will change and are changing; that means changed capability, but it also means a change in how we buy our kit. Certainly, if we look at some of the absolute procurement disasters under the last Government—only two of 49 defence procurement projects are on time and on budget—we see that we need not only to buy the right kit, but to buy it better. That is something that the last Government clearly failed to do; the shadow defence procurement Minister himself, the right hon. Member for Rayleigh and Wickford, described the defence procurement system as “broken”. We need to take steps forward, and the SDR and the defence industrial strategy will set out how we will improve defence procurement.

[Mr Speaker]

I call the new Member for Kent, Jim Shannon.