Oral Answers to Questions

Mary Glindon Excerpts

Monday 15th April 2013 Commons Chamber

[Diana Johnson (Kingston upon Hull North) (Lab)]

10. What recent progress he has made on balancing the defence budget.

[Mrs Mary Glindon (North Tyneside) (Lab)]

17. What recent progress he has made on balancing the defence budget.

[The Secretary of State for Defence (Mr Philip Hammond)]

I announced to the House last May that we had eliminated the black hole in the finances of the Ministry of Defence that we inherited from the Labour party, and had brought the Defence budget into balance. Since then, on the one hand, we have been required to make further budget reductions in 2013-14 and 2014-15 of £1.2 billion in total as a result of the Chancellor’s announcements at autumn statement 2012 and Budget 2013; on the other hand, we have made further savings through efficiency and renegotiation of contracts and have been granted exceptional levels of end-year flexibility by the Treasury to carry forward 100% of our 2012-13 underspend, including unneeded contingency provisions, into 2013-14 and 2014-15. In consequence, we are confident that we can absorb the budget reductions announced without any significant impact on core defence output in those years.

[Mr Hammond]

The Government have announced that there will be a spending review—spending review ’13 —which will set the budgets for non-ring-fenced Departments, including Defence, for 2015-16. There has been an announcement confirming that the equipment programme will be protected in the defence budget, with a real-terms increase of 1% per annum between 2015-16 and 2020-21.

[Mrs Glindon]

Ministers have pledged an annual real-terms 1% increase in defence equipment spending post 2015, but in what year, under current plans, does the Secretary of State forecast the whole defence budget rising in real terms?

[Mr Hammond]

I am not going to pre-empt the outcome of SR 13; nor am I going to conduct the spending review in public. My Department is engaged in analysis with the Treasury and the Cabinet Office, in search of genuine efficiency savings. Where we can find such savings, for example in the equipment support programme, the Ministry of Defence will willingly do its bit to contribute to fiscal consolidation. I will, as you would expect, Mr Speaker, argue vigorously for the resources that Defence needs to deliver Future Force 2020 in accordance with the strategic defence and security review 2010.