Defence Spending

Debate between Lord Lancaster of Kimbolton and Gerald Jones

Tuesday 16th July 2019 Westminster Hall

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan) on securing this important debate and on setting out the case. She highlighted the fact that defence does not feature in our postbags, as we are all aware, and as a result it does not get the focus it needs. She also talked about the conscious choice by Government in recent years to reduce Government spending on defence, which, as she said, was based on a false premise.

There were some excellent contributions to the debate, from my right hon. Friend the Member for North Durham (Mr Jones), the right hon. Members for New Forest East (Dr Lewis) and for Rayleigh and Wickford (Mr Francois), my hon. Friends the Members for Plymouth, Sutton and Devonport (Luke Pollard) and for Glasgow North East (Mr Sweeney), as well as the hon. Members for Strangford (Jim Shannon), for St Ives (Derek Thomas), for Somerton and Frome (David Warburton), for Filton and Bradley Stoke (Jack Lopresti), for Witney (Robert Courts) and for Ayr, Carrick and Cumnock (Bill Grant). One point of consensus that all the speakers highlighted in different ways was the need to increase defence spending.

Labour is committed to spending at least 2% of GDP on defence, in line with our NATO commitments. The last Labour Government consistently spent well above the 2% figure. Sadly, since then we have seen a sharp fall in the real-terms value of the defence budget. Independent analysis by the House of Commons Library has shown that defence spending in the last financial year was £9.3 billion lower in real terms than when Labour left office.

The debate is ongoing on the appropriate level of defence spending, with both candidates for the Conservative leadership adding their thoughts. That is particularly galling when both of them have consistently voted for budgets that have slashed defence spending to what it is today.

[The Minister for the Armed Forces (Mark Lancaster)]

In his haste to criticise the leadership candidates for their commitments to increase defence spending, can the hon. Gentleman point to a single speech where the Leader of the Labour party—not its defence spokesman—has indicated that he wishes to increase defence spending?

[Gerald Jones]

I was not attacking the comments of the candidates for the Conservative party—they are welcome. I was saying that it is galling that they voted for cuts. The Leader of the Opposition has highlighted, as did the last Labour party manifesto, our commitment to a 2% minimum for defence spending, in line with the NATO commitment. He has also said that we cannot do defence on the cheap. He is as committed as our party to spending on defence.

Added to the squeeze on defence spending is the fact that the MOD’s purchasing power has suffered from the fall in the value of sterling after the Brexit vote. Of course, what matters is not just what is spent, but how it is spent. As we debated last Thursday in this Chamber, we need to use the defence pound to support UK prosperity and to back UK defence workers. Labour wants more MOD defence contracts to be awarded here in the UK, and we would like to start with UK-only competition for the fleet solid support ships. As my right hon. Friend the Member for Warley (John Spellar) highlighted, that is a matter of political will. Not only is it vital that we support the UK defence industry to retain our sovereign capability; we also know that investing in the UK leads to additional revenue coming back to the Exchequer in taxation, higher national insurance contributions and lower social security payments—not to mention the value of apprenticeships and spending in the wider economy.

We know from reports by Oxford Economics that the UK defence industry has an output multiplier of 2.3, which means that a £100 million investment in the UK industry generates some £230 million to the UK economy. Its reports have also highlighted the fact that each additional job created in the manufacturing element of the defence industry results in a further 1.8 jobs being created in the wider economy. I am sure that the Minister will want to convey that message to the Treasury. Of course, sufficient levels of defence spending depend on an economy that is growing, so I hope that the Minister will join the Opposition in opposing a harmful no-deal Brexit, which would be damaging to our GDP and would therefore threaten all Government spending, including spending on defence.