Defence Spending

Lord Kerr of Kinlochard Excerpts

Thursday 25th April 2024 Lords Chamber

[The Earl of Minto (Con)]

My Lords, I thank my noble friend for that question. On the Treasury, the Chancellor has absolutely been involved throughout this entire conversation and is fully supportive, as is the Prime Minister, of exactly what we are trying to achieve. On gifting and the replenishment of munitions and stocks, everything that we have gifted, including in the announcement this week, is within its sell-by date but is no longer really necessary. Replacements are coming in of new, modern equipment. The Army is perfectly happy to gift this to the Ukrainian effort.

[Lord Kerr of Kinlochard (CB)]

My Lords, I used to work for Peter Carrington and Denis Healey, two great Defence Secretaries. I have been trying to work out how they would have reacted to this Statement. They would certainly have welcomed the increase in defence spending. It is clearly necessary and they would have said so. I think they both would have said that it is not enough but that it is certainly to be welcomed.

Denis Healey certainly would have found it impossible to accept the construction of the £75 billion. Could the Minister confirm that £75 billion is reached only by making the rather ludicrous assumption that the baseline is flat in cash terms, with reductions in real terms in every year of the six-year period? That is the baseline on which one can build annual increments summing to £75 billion. Perhaps he could confirm that is the case. Denis Healey would never have tried such odd accounting.

Peter Carrington would have argued that it is unwise not to prepare the country for a certain amount of pain. The Government are trying to present necessary defence increases as painless. It might be better to admit that there will be a cost, either in taxation or in less money for domestic programmes. The defence of the realm is the first task of government.

It is also absurd, in the week in which President Biden and Speaker Johnson have come forward with a rather substantial programme of assistance to Ukraine, for our Defence Secretary to stand up and say that the NATO partners looked to each other for leadership and the UK Government stepped forward to provide the alliance with the decisive leadership demanded in this knife-edge moment and that, in the build-up to the NATO summit in Washington, he—Mr Shapps—would be doing all he could to get alliance members to follow our lead. This is absurd talk. We should speak softly and carry a big stick. The stick is slightly bigger—not big enough in my view—after this week’s announcement, but we must learn to avoid the bluster and bravado and speak more sensibly.

[The Earl of Minto (Con)]

My Lords, the financial detail is quite complicated and I think it is better if we write and explain how the figures are built up.

It is clearly an ask for the British public. The cake is finite, as I have said before, and defence needs more. It is not an inconsiderable amount of money that we are increasing the defence budget by, and there is a question of how much money you can spend over time. It is rather like building a house, in that you cannot spend it all at once; you have to build up. If you look at where the investment focus is within the next few years, you find that, first, it is on firing up the UK industrial base, including £10 billion for a new munitions strategy. That is extremely important. Secondly, it is on ensuring that our Armed Forces benefit from the very latest technology, through the DIA. Thirdly, it is on guaranteeing long-term support for Ukraine; if we do not do that, it is just going to become more and more expensive. As the Secretary-General said the other day, this is the cheapest time to defeat the Russians. Fourthly, it is on ensuring that expenditure is effective through radical procurement reform, which I have already covered.