Integrated Review

Lord Newby Excerpts

Monday 23rd November 2020 Lords Chamber

[Baroness Smith of Basildon (Lab)]

My Lords, the first duty of any Government is the safety and security of its citizens. The Statement on defence spending is obviously welcome news. The Prime Minister’s announcement of what he called, without any sense of irony, an end to the “era of retreat” is necessary, given that the Conservatives’ last two defence reviews have led not only to spending cuts of £8 billion but to a reduction in the size of the Armed Forces by 40,000 full-time troops.

The enormous international uncertainty we face today reflects the diversity of the dangers we face: adversaries investing heavily in new military; the devastating effects on our health and finances of the global pandemic; economic and security uncertainty as we hurtle towards the end of the Brexit transition without knowing if, when or what the deal will be; technological developments such as AI and sophisticated internet communications that we previously only imagined; and a climate emergency—while the Government’s seeking to write into legislation the right for Ministers to break the law has done little to enhance our international standing. So, there are huge challenges.

However, these uncertain and dangerous times also provide an opportunity for the Government to outline a new vision of the UK’s place in the world. We have been here before: soon after the Second World War, the leadership of Clement Attlee and his Foreign Secretary Ernest Bevin was instrumental in setting up NATO. Its enduring strength in providing collective security serves as a constant reminder of what the UK can achieve on the world stage. In 2002 the significance of our landmark International Development Act was recognised throughout the world, and during the 2008 financial crisis we worked globally to secure an economic rescue plan. I know I am not alone in wanting us to show such global leadership again, because when we have the vision and the moral imperative, the UK is a force for good in the world. We must ensure that our Armed Forces are properly funded and that they are integral to that vision.

It was almost 60 years ago that Dean Acheson, a former US Secretary of State, observed that Britain has lost an empire but failed to find a role. We ceded that issue with our membership of the EU but, as we leave, the need to define our place in the world again becomes key. This is why it is so disappointing that the Prime Minister’s Statement fails to provide the strategy to meet the many challenges we face today. For a Statement on an integrated review, it does not feel very integrated, lacking both a wider foreign policy context and clarity about the Government’s priorities. For example, other than passing references, the Statement fails to mention the security implications of climate change and how we will respond. Can the noble Baroness tell the House when the MoD’s climate change and sustainability strategy will be published?

Also, there is no commitment in the Statement to the Conservatives’ election manifesto pledge to maintain 0.7% GNI on aid. Following the abolition of the Department for International Development, this could have been an opportunity to restore confidence in how we see our international role. The former Prime Minister David Cameron’s statement that abandoning the 0.7% pledge would be

“a moral, strategic and political mistake”

was endorsed by the noble and gallant Lord, Lord Richards, a former Chief of Defence Staff, saying that this spending is hugely in the UK’s interests. The benefits that such funding has brought across the world reinforce why an integrated strategic approach is so important, and again bring home why those cuts to the budget jeopardise Britain’s soft power and influence. We have had many debates on this in your Lordships’ House and that soft power is critical to how we meet the threats faced and define our place on the international stage.

People need to be placed front and centre of our defence strategy, whether our brave Armed Forces personnel or those working in supporting industries. With the current jobs crisis, we welcome the commitment in the Statement to 10,000 new jobs every year. Can the noble Baroness say where these jobs will be and how they will be recruited and monitored? Will she today rule out any more personnel cuts across the Army, the RAF and the Navy? Can she also say what lessons the MoD have learned from previous overspends and mismanagement?

Last year, the Public Accounts Committee reported on the disastrous failure of the deal with Capita for Army recruitment. That contract has seen costs soar up to £677 million in 2018 and yet it has failed to deliver, leaving the Army understrength. The PAC also highlighted problems with other contracts and added:

“We are disappointed to see the MoD replicate the contract management errors that our Committee sees all too often across government.”


Our military deserves better and increases in spending must be matched by rooting out such scandalous wastes of public money.

I also ask the noble Baroness about the certainty of this funding and its impact on other areas of public spending. The costs of the pandemic are eye-wateringly large. Government borrowing between April and November was £215 billion and is projected to rise further. The deficit continues to grow. The announcement that the defence budget will grow by 4.2% above inflation each year means that, by 2024-25, it will be £7 billion higher than at present, in real terms. That is a significant increase, as she is aware. With the spending review this week, there are strong indications that the Chancellor will impose a public sector pay freeze, including for military personnel and those who have been at the heart of tackling this pandemic and protecting the public. Post Covid, we need to invest to regrow our economy and protect jobs. We all know that difficult decisions will have to be taken. Can the noble Baroness, without pre-empting the Chancellor’s Statement, tell the House whether the additional costs of defence spending will be met from increased taxation or cuts in other areas of public spending?

In his Statement, the Prime Minister is correct to say that

“our national security in 20 years’ time will depend on decisions”

that he is making today. Unlike the extensive consultation in 1998, the call for evidence for this review lasted just one month. We expected to see the integrated review published this month and I understand it has now been delayed until next year. I do not know if the noble Baroness is able to explain the reasons for the delay, but I hope that she will tell your Lordships’ House that the delay will allow for engagement and consultation with all involved. Doing so will have an impact on the likely success of such an integrated review and strategy. We need an ambitious strategy to develop new international relationships and protect our country against serious threats in the years ahead. Defence spending is essential to this, but the Government still need to address the strategy and identify the diverse threats to peace and stability. Doing so requires a coherent, co-ordinated plan with, at its core, a vision of the UK as a moral force for good.

[Lord Newby (LD)]

My Lords, I thank the noble Baroness the Leader of the House for answering questions on the Prime Minister’s Statement. The Prime Minister begins by saying that he

“will update the House on the Government’s integrated review of foreign, defence, security and development policy”

but the Statement does nothing of the sort. It is simply a statement of increased military expenditure, particularly on the Navy. The Prime Minister has successfully wrenched the nation’s credit card from the Chancellor’s possession long enough to provide for significant additional expenditure on defence kit. In themselves many, if not all, of the items on the shopping list are clearly desirable. Who could possibly object to having more frigates or drones, better AI or the National Cyber Force? But it seems more than somewhat bizarre to be announcing this additional spending in advance of the completion of the integrated review. Could the noble Baroness explain to the House exactly when that review will be published?

It is particularly worrying when we hear repeated rumours of a cut from 0.7% to 0.5% of GDP spent on overseas development. Can the noble Baroness the Leader confirm that these rumours are simply untrue? If she cannot, what is the rationale to spend more on military kit and to cut the aid budget? How could robbing Peter to pay Paul in this way possibly lead to a net gain in our credibility and reputation, taking account of the soft, as well as hard, power we wield as a nation?

The Statement waxes lyrical on the need to fight terrorism, and no one can disagree, but the best way to fight terrorism and protect our security as a nation is in the closest possible co-ordination with our nearest allies. Is it therefore not reckless of the Government to have completely failed to address security co-operation with our EU partners, as part of the Brexit negotiations? Does leaving the EU systems for sharing information on criminals and terrorists, and the European arrest warrant, not present a body blow to our ability to identify, track and trace individuals who pose a direct threat to our security?

There is no update or set of principles on foreign policy, just a general statement that the world is an increasingly dangerous place. This a pretty thin basis for detailed defence procurement priorities. In the Statement, the Prime Minister says that new technological advances will

“surmount the old limits of logistics”,

but there are no advances that mean that fighting ships do not require refuelling or that sailors do not require feeding. When one of our carriers is deployed to the Far East, for example, how is it to be provisioned and, given that the new frigates will not be built for a number of years, how will it be protected?

While there is quite a lot about the Navy in the Statement, there is nothing at all about the Army. What does this mean for Army expenditure? For example, are the Government committed to keeping troop levels at their current levels and are rumours about reducing the number of tanks correct? How does this increased expenditure fit into the Government’s overall public expenditure plans? We will be hearing more from the Chancellor later this week but, given the weakness of public finances, the expenditure being discussed today simply cannot be funded by increased borrowing. To echo the noble Baroness, Lady Smith, which other areas of public expenditure will fall or which taxes will rise to pay for this?

The noble Baroness will no doubt say that she cannot give an answer to these questions because that would pre-empt Wednesday’s Statement—but today’s Statement pre-empts Wednesday’s Statement. The truth is that the Prime Minister has done what he does best: making exaggerated claims for future policy developments, while leaving the Chancellor of the Exchequer to pick up the bill. That is the fundamental problem with this Statement. It is isolated from the integrated foreign, defence, security and development review and from the overall tax-and-spend strategy of the Government. With its soaring rhetoric, Boy’s Own breathlessness and glowing references to past glories, it runs the risk of being isolated from any realistic assessment of Britain’s place in the modern world.

[The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)]

I thank the noble Baroness and the noble Lord for their comments. I will start by talking briefly about the integrated review, as they both asked some questions about it. We will conclude and publish the full integrated review early next year. Both noble Lords asked about the delay and, as they rightly said, the review was announced in February; it was then paused in April, due to Covid, and restarted in June. So we did have a delay in the review and it will now conclude early next year. However, we are in the final phases of it, aligning our ambition with our resources. The defence settlement outlines the first conclusions of the review, which will put us on the front foot as we equip our Armed Forces for the threats of today and tomorrow, while ensuring that long-term defence projects have certainty and are not put on hold.

When the full integrated review concludes early next year, it will set out our overarching strategy for national security and foreign policy, including defence, diplomacy, development and national resilience. It will set the direction for more detailed strategies and departmental activity in the coming years. It will also set out the way in which the UK will be a problem-solving and burden-sharing nation, and a strong direction for recovery from Covid at home and overseas. That issue was touched on at the G20 virtual summit held over the weekend, when all the leaders discussed it.

The noble Baroness, Lady Smith, rightly talked about making sure that all parties were engaged. I can certainly reassure her that this is a cross-Whitehall process, allowing all to contribute expertise and analysis—not only within Whitehall but with partners, including NATO. Our closest allies have been involved during the process and will continue to be so. She also asked about the defence review, which is ongoing. Further details will be updated in due course.

Both noble Lords asked about spending. This is the only multiyear settlement for any government department that will be announced this year. I can reassure them that it has been fully costed, building on extensive work by the Treasury and MoD to understand what future capabilities will cost and how much can be delivered through efficiencies.

The noble Baroness talked about jobs, quite rightly. We expect this settlement to create up to 10,000 jobs each year across the UK, and as many as two-thirds more in the supply chain. Both noble Lords will be aware that in 2018-19, the MoD supported over 400,000 jobs, while defence spent £19.2 billion with UK industry last year. This new settlement will support further jobs in a whole array of areas: in shipbuilding, for instance, and obviously in emerging technologies—in space and in the building of the Tempest. We hope that this spending will create jobs in a range of ways. Part of the investment will also be looking to upskill and make sure that we can provide jobs for people around the whole of the United Kingdom—Scotland obviously being key to some of the developments that we are talking about. Hopefully this will be a UK-wide investment in jobs.

Both noble Lords rightly asked about international development. We are of course extremely proud of our work there. We remain committed to supporting international development and helping the world’s poorest people. Of course, our Armed Forces are also a humanitarian force for good, coming to the aid of the most vulnerable following natural disasters, bringing stability to countries marred by conflict with peacekeeping missions and bolstering efforts to tackle Covid in the developing world. Both noble Lords will both know that the spending review will be announced on Wednesday; funding will be announced then.

The noble Lord, Lord Newby, asked about the Army. I can assure him that the UK will continue to have full-spectrum Armed Forces, including an armoured capability. But we also need to ensure that we focus on how the Army is equipped and what we want it to do. This settlement will ensure that our soldiers have some of the best equipment in the world, so that they can continue to do their fantastic job.

Both noble Lords talked about global leadership. They are absolutely right, which is why this settlement raises our defence spending to 2.2% of GDP. That is more in cash terms than any other European ally or NATO member, other than the United States. We will continue to lead internationally. Next year is a critical year for our international leadership, as we have the G7 presidency, COP 26 and the 75th anniversary of the first UNGA meeting in London. We will continue to play our part on the global stage, and this settlement will help us to do that.