Defence Spending

Nick Harvey Excerpts

Thursday 12th March 2015 Commons Chamber

[Sir Nick Harvey (North Devon) (LD)]

I start by apologising because, as I explained to Mr Speaker, a long-standing engagement elsewhere, and an almost as long-standing train reservation, mean that I will have to depart almost as soon as I have spoken, but I am grateful for the opportunity briefly to do so. This has been an excellent debate marked by contributions from colleagues who are leaving the House and will be deeply missed, not least my right hon. and learned Friend the Member for North East Fife (Sir Menzies Campbell) and my hon. Friend the Member for Mid Worcestershire (Sir Peter Luff), who was a first-class colleague in the Ministry of Defence during some very tough times.

Before the last election, all three parties committed to a strategic defence and security review following the election. I had fondly imagined that that process would be allowed to take some 18 months or so, as had the 1998 review, and that it would be a deep and profound study of what we needed. What we actually found coming down the tracks at us was a brutal comprehensive spending review, and we had to make a very quick decision as to whether we were going to allow ourselves the luxury of the 18-month review or would do a quick and dirty review and try to equip ourselves with the arguments that might help us to increase the size of our cash envelope, to which my right hon. and learned Friend the Member for North East Fife referred, recognising that more detailed work would have to take place afterwards. In the event, the cut of some 7.5% that was applied to the budget—or a little over 16% to the programme, which was at that time overheated—led us to make some very unpalatable decisions that none of us came into politics wishing to make. Decisions such as axing the Harrier were absolutely wretched and painful things that nobody wanted to make.

The painful decisions that were made in 2010 by Ministers and by defence chiefs were, as others have said, made against the background that the sunny uplands would follow and that for the period after 2015 the Ministry of Defence could at least look forward to a flat real budget supplemented, as came later, by a 1% real-terms increase in the equipment budget. If this year’s comprehensive spending review visits further cuts on the defence budget, bearing in mind that there have been a couple of mini-CSRs in the past couple of years that have already done some damage, it simply will not be affordable for us to come up with anything like Future Force 2020, which was articulated in 2010, let alone the wider and more ambitious prospectus that was outlined so lucidly by the Chairman of the Defence Committee. I would not demur from that in any significant way, although that would certainly have taken the budget way beyond the realms of 2% of GDP and rather, as the hon. Member for Basildon and Billericay (Mr Baron) said, nearer to 3% or even 4%.

Of course, it is right that we have another review now. I am a firm supporter of having a review at least every five years, because the world can change an awful lot in five years, as it has in the past five years. We would do well to try to break ourselves out of the unfortunate cycle where we propel ourselves into one of these reviews at the outset of a Parliament, when there is a comprehensive spending review looming over the whole thing. It would be better if it could be done at a later point in the Parliament so that we get out of this unfortunate cycle.

The significant changes in our security assessment since 2010 are the diminishing relationship with an increasingly aggressive Russia, the rise of Islamic State, and the ever-growing threat of global terrorism and cyber-attack. When one looks at some of the specific issues that will be on the table, with which Defence Ministers, whoever they are this summer, will have to grapple, it is clear that the painful decisions we thought we were taking in 2010 may be but nothing compared with some of the agonies that will be on the table from now on.

I think there is a general consensus that the nation will not find acceptable the 2010 conclusion that we would spend £7 billion on building two aircraft carriers, and then tie up the second one, and that we must in some way deploy the second. That will have a manpower implication which was not taken into account when cuts in naval headcount were made in 2010. We also have a general consensus that we must make good the pledge to go back into the realms of maritime patrol. We have to do that if we are going to embark a carrier fleet in Plymouth. That will have a resources implication and potentially even a manpower implication.

We do not know how many joint strike fighter aircraft we will be able to afford. We seem to have forgotten all about DPOC—deep persistent offensive capability—and the role that air-based joint strike fighters were supposed to have fulfilled. As the saga—I think it would be fair to call it that—of the F-35 rolls on and on, we still do not know what the unit cost of these aircraft will be or how many we will be able to afford. At the time when BAE got its work share, our commitment was meant to be 130. So far, as I understand it, we have bought four, and we are talking about sailing carriers with 12 on board. I have absolutely no idea where the number is going to end up. This is not just a shopping list; there are also manpower implications for how many of these things we have.

We are supposed to be having 13 frigates in order to get us back to the princely goal of a destroyer frigate fleet of 19, but one hears worrying rumours that some of the past mistakes are being repeated and that this is getting almost as big and expensive as the Type 45. I wonder how many we are really going to end up with. Again, that has manpower implications. On amphibious shipping—the ability to enter a theatre of war from the sea—HMS Ocean is due out of service in 2018. Is she going to be replaced? Albion remains tied up. What are we going to do about this? We will lose a serious capability if we do not resource that.

We need more ISTAR—intelligence, surveillance, target acquisition and reconnaissance—assets. The lack of that capability inhibited what we were able to do in Afghanistan and was conspicuously a problem in Libya. We have not resolved the saga of Army vehicles. The hon. Member for Merthyr Tydfil and Rhymney (Mr Havard) was extremely pertinent in his observations on that. We have all sorts of balls in the air relating to the future of remotely piloted aircraft—a matter of great importance to our future capability. Again, there are cost pressures there that are not even factored in. Chinook and Apache both need upgrading. I could go on; this is not an exhaustive list.

The existing budget as predicted cannot pay for all that, let alone withstand any cuts that might come this autumn. Let us remind ourselves of the gap. The RUSI paper, with which I entirely agree, and whose figures accord with what I recall from the last time I saw any, suggests that we will be at 1.95% spending next year—one might hide one’s blushes there with a bit of creative accounting—but that by year 2 there will be a gap of £3 billion and by year 4 a gap of £6 billion. That is if no cuts at all are made this summer; if any are made, the situation will get worse and worse.

We seem to have got to a situation where all three political parties recognise that Britain has global interests and have a genuine will that we ought to be part of international coalitions to protect those interests. All three parties agree, in principle, with the commitment that the Prime Minister gave, in principle, at Newport, that we ought to be spending at least 2% of our GDP on defence. Yet given those figures, with an extra £6 billion a year needed to do that by year 4 of this Parliament, it is small wonder that neither the Chancellor, the shadow Chancellor, nor—I am not trying to score a political point here—the Chief Secretary to the Treasury have exactly been on the front foot so far in explaining where £6 billion a year could possibly come from.

I would say to everyone who has taken part in this debate, because we are, by definition, defence enthusiasts, that whether or not this issue takes light during the election campaign, we will have to come back—those of us who manage to come back—to debate these things again and again through the rest of this year as we conduct an SDSR and a CSR and keep the pressure on our Treasury colleagues, of every colour, to honour the commitments given at Newport and the needs so powerfully outlined by the Chairman of the Defence Committee in describing where the shortfalls will occur.