Defence: Budget

Lord Ashton of Hyde Excerpts

Wednesday 17th June 2015 Lords Chamber

[Lord Sterling of Plaistow (Con)]

My Lords, may I say first how much I appreciated the help and advice of the noble Lord, Lord Astor, as Defence Minister in the last Parliament? I am delighted that my noble friend Lord Howe, our new Defence Minister, is going to continue the special briefings at the Ministry of Defence that many of us have found hugely useful over the years.

I am particularly grateful to have been given this opportunity to have an early debate on defence in advance of the Chancellor’s Budget on 8 July. I take it as rather a compliment that senior Members of the other place involved in defence have come here today because they are interested in this debate.

I understand that the new strategic defence and security review will be most thorough. I was very involved in the last review in 2010, which frankly turned out to be purely a cost-cutting exercise. The press has indicated that there will be a further cut this year of some £500 million, but I have no doubt that, in aggregate, this figure will turn out to be considerably higher. I fully understand the short-term expediency; nevertheless, I hope that this is not a strong indication of the Government’s approach to the long-term strategic requirements of the Ministry of Defence.

Many in this House and in the other place have been concerned for several years that the budget for the defence of the realm is inadequate to meet the needs of this country’s declared foreign policy, which was reiterated in the gracious Speech. Of late, this concern has undoubtedly accelerated and those in government must accept that the strength of feeling emanates from those who have considerable experience and knowledge of the subject and should not be taken as superficial observations.

A debate on defence and security cannot be held in the abstract. We have to consider the context—the full circumstances in which we find ourselves; the risks, the opportunities and all the Government’s wider ambitions and objectives, particularly in relation to foreign policy.

There are four crucial elements to that context now. The first is the Government’s commitment to a renegotiation of this country’s relationship with Europe. That is an election pledge and success depends on finding a truly new point of mutual advantage between ourselves and our European partners.

Secondly, there are unresolved conflicts around the world in many of which we have an interest, individually and as part of wider groupings, particularly NATO. As the Conservative manifesto said, the first duty of government is to keep us safe—and there is certainly no shortage of threats to that safety. In the Middle East there are unresolved conflicts—Iran, Iraq, Syria, Yemen—and also in north and west Africa, where we have a great commercial interest as well as a partnership with other EU member states. Then there is the development of international terrorism, which has roots in the Middle East but which has an impact that goes much wider and can hit us here at home. There is also, of course, the renewed hostility between Russia and the West, exemplified by what has happened in Ukraine. Afghanistan and Pakistan are still viewed with great concern, and China’s ambitions in the China Sea in relation to her neighbours are more than worrying.

The third element of the context is the surge in the humanitarian challenge caused by risks such as disease and forced migration. We cannot isolate, or wish to isolate, ourselves from these risks and our Armed Forces play a key role in these situations—hard power exercising soft power.

The fourth factor is the crucial need for financial strength, which is fundamental in order to achieve the first three. Reduction of the deficit and the full and sustainable re-establishment of a secure macroeconomic framework will give us that long-term strength. No one supports this view more than I do. Unfortunately, ring-fencing of government departments creates major distortions in the budget of those not ring-fenced and has the effect of losing the flexibility that one in management in organisations outside of government would always wish to retain. Indeed, the worst example is enshrining the DfID budget in law. There are areas where I certainly believe the utilisation of soft power is both worthwhile and morally correct and right, but there is much that I would heavily question.

Given all these factors, a clear, constructive, long-term defence policy, backed by an assured commitment of resources to the Armed Forces and underpinned by a modernised, long-term relationship with our defence sector is of key importance. In Europe, powerful, practical assistance on defence and security is the thing we can offer as we negotiate a new relationship. History has made some countries in Europe wary of all military activity. That is totally understandable. Others lack the necessary experience and capability. But Europe needs to be defended. It needs to be secure, internally and externally, and we are in a unique position to help. We are not in the euro but, through defence co-operation, we can make a contribution to Europe which few, if any, others can match. Our history is such that we can build on our unique historic relationships with the Commonwealth, the United States of America and Asia, but we must have the long-term resources to do the job.

That does not mean intervening everywhere. It means retaining and using the ability to help others to help themselves. It means that first-class hard power has the effect to deter potentially hostile action by others and to provide help and assistance when it is needed. The quality of our hard power is of crucial importance to having the flexibility to deal with the unexpected. Without doubt, history teaches us that.

Although the Chancellor has stated publicly that the Royal Navy will be the,

“most modern navy in the world”,

that still begs the question: what size should the Royal Navy be—or indeed the Army and the Royal Air Force—in order to meet the expectations of our foreign policy? Well-targeted defence spending can help sustain the very welcome recovery in the economy right across the country. The Chancellor has spoken eloquently about the northern powerhouse. I agree with him about the need to spread prosperity beyond the Home Counties. Nothing does that more effectively than the defence sector, which is the source of tens of thousands of highly skilled jobs in places such as Barrow, Derby and Warton.

May I reiterate what I said recently? The report commissioned by Professor Nick Butler and myself and produced by the Policy Institute at King’s College London a few weeks ago clearly shows that defence spending in this country has a strong multiplier effect. The best available evidence suggests that for every £100 spent, £230 of value is generated. As the King’s report says, defence spending is an undoubted benefit, not a burden.

Investment in defence gives us the ability to develop and produce leading-edge technology in a whole range of fields, from unmanned aircraft and command and control systems to cryptography, thanks to great collaborative work between people working in companies, the armed services and universities. That technology enables us to defend ourselves without being dependent on imported technology over which we might not have ultimate control. It also enables us to develop and sell products, earning export revenue, and again sustaining highly skilled jobs.

Ultimately, this is all about people. We are most fortunate to have the finest of our young people being prepared to serve our country, and indeed if necessary to pay the ultimate price. Through Motability I often see the sadness of those whose lives and whose families’ lives have been changed for all time. Morale—a word that most of us have always been involved with—is based, as we all know, on much more than money. It is being assured that those in power—the Prime Minister, the Chancellor and other senior Ministers—care about and are passionately supportive of long-term endeavours on our behalf, because it is the long term that is key.

Finally, in a way I consider this to be an emergency debate because I believe that we are at a crossroads. The Government have the clear opportunity to strongly regain our standing and influence in the world, but if we do not seize the moment, history will undoubtedly record that this was the time when we finally endorsed the decline of this great island nation. The choice is ours.

[Lord Ashton of Hyde (Con)]

My Lords, I remind noble Lords that this is a time-limited debate. The remaining noble Lords except for my noble friend the Minister have a time limit of three minutes, so when the Clock shows three minutes, their speaking time is up.