King’s Speech

Lord Walney Excerpts

Thursday 25th July 2024 Lords Chamber

[Lord Walney (CB)]

My Lords, I draw attention to my entry in the register of interests, in particular, my role advising Leonardo as part of the Purpose Coalition. I, too, am delighted at the appointment of my noble friends as Ministers in the new Labour Government, and at the superb choice of my noble friend Lord Robertson as the lead reviewer. If there was any doubt before, his appointment makes it clear that there is no danger that the new Government will listen to the occasional siren voice in the foreign and defence establishment questioning the nuclear deterrent, among other things.

I shall focus my remarks on the Government’s target of spending 2.5% of GDP on defence. The noble and gallant Lord, Lord Houghton, made a powerful speech that was among those setting out why a spending target in numeric terms is not sufficient and must be accompanied by an expansive vision. Nevertheless, it is necessary. It is an important marker and signal to our adversaries of the seriousness with which this Government and country will take defending the nation.

The Prime Minister made it clear as recently as the NATO summit that the Labour Government’s commitment to 2.5% is cast-iron. The manifesto makes it clear that the Government’s No. 1 priority is to defend the nation, and that sentiment was echoed at the Dispatch Box by my noble friend the Minister in her opening remarks. The Government know that the diversity and intensity of the threats they face, the determination and expansiveness of our adversaries and the scale of sustained investment required mean that words to that effect must be backed by action. If defence is the top priority of the Government, they have to prioritise spending on the defence realm.

Let us look at a key example this week. In the other place, the new Government faced an early challenge from opposition parties and a number of their own Members of Parliament—to remove the two-child benefit cap. That desire is entirely understandable and right. The scale of child poverty in communities across the UK is deeply affecting, and removing the cap would be an effective mechanism, taking many thousands of children out of poverty.

However, in an environment where global threat levels are so high and diverse; where incoming Ministers and the Prime Minister apparently agree with the assessment of the head of the British Army that we must be ready to fight a war within three years, as the fallout from Russia’s appalling aggression in Ukraine continues; where the Middle East is deeply unstable; where we are pressing on with the national endeavour to renew the nuclear deterrent and strengthen our cyber deterrence; where we have an equally unshakeable commitment to the AUKUS security alliance to deal with the rising Pacific threat; and where we recognise that all our goals for social progress at home are underpinned by security and deterrence abroad, how could we justify removing the benefit cap—a worthy measure but not a manifesto commitment—ahead of the clear manifesto commitment to increase defence spending to 2.5% of GDP?

This is not a trivial tension. Figures provided to me by the Lords Library today estimate the cost of removing the cap to be £2.1 billion this year, £2.4 billion next year and £2.8 billion in 2027-28. Based on the current official economic forecast, if you added that to the last Government’s projected increase in defence spending, you would reach 2.5% by 2028. Let us not forget that all this is happening in an environment where the western alliance may be set to face its greatest challenge for many decades, depending on events across the Atlantic. Britain cannot afford to leave increasing investment in our defences to another day.