Defence Expenditure

Patrick Grady Excerpts

Thursday 27th October 2016 Westminster Hall

[Dr Lewis]

It is significant, and it is indeed included on the chart. The only reason why I did not mention it is that, in comparison with the total spent on the other high-spending Departments, it is a relatively small proportion of our GDP. However, my hon. Friend is absolutely right because, such has been the decline in defence, our commitment to spend 0.7% on international development now amounts to one third of the total that we spend on defence, which comes in just above the 2% minimum.

When we called the report “Shifting the goalposts?”, we put a question mark at the end because we did not wish to prejudge it. There are two ways in which the Government could be said to have shifted the goalposts: first, by including things they are not allowed to include—we absolved them of that—and, secondly, by including things that they are allowed to include but never included in the past, which would mean that we are not comparing like with like in terms of our previous methods of calculating UK defence expenditure. The Defence Committee inquiry found that the NATO minimum would not have been fulfilled if UK accounting practices had not been modified, albeit in ways that are permitted by the NATO guidelines.

[Patrick Grady (Glasgow North) (SNP)]

Is the right hon. Gentleman aware that some of the money that is counted in the 0.7% official development assistance is also counted towards the 2%? I might take issue with some of his line of argument, but it sounds like he is arguing that that double counting should not be double counted.

[Dr Lewis]

We did not find a hard and fast case of double counting, but we noticed in the past that there are items of expenditure that are highly relevant to defence and security that could fairly and usefully be catered for by the international development funds. Given that the 0.7% is protected, and given that one sometimes hears stories of the Department for International Development struggling to find creative ways of spending the money it has to dispose of, there is an opportunity, particularly in relation to soft power, to use elements of the international development money for measures that add to our security.

Of course, this is a rather crude measure, because gross domestic product can vary. If this country’s gross domestic product goes down but we spend the same amount on defence, it might appear that we are doing more when we are doing nothing of the sort. Similarly, when the value of the pound changes, as has happened in the short term following the Brexit decision, we see the effect on what we are able to buy for the money we have available for defence when we purchase big-ticket items such as the P-8 maritime patrol aircraft from the Americans, although a considerable amount of that purchase will find its way to the British defence industry. What I am driving at is that perhaps we ought to be talking not about shifting the goalposts, but trying to move the benchmark.

We should be reminding people that, in the 1980s—the last time we faced a significant threat from the east in Europe in the second and closing phase of the cold war—we regularly spent between 4.5% and 5.1% of GDP on defence. The similarity lies not only in the international situation. In the 1980s, we simultaneously faced a very significant terrorist threat in the form of Irish republican terrorism. We now face a similar threat in the form of fundamentalist Islamist terrorism.

It therefore seems appropriate to note that and, in the week that we were told that the first of the successor submarines for the nuclear deterrent will be named HMS Dreadnought, to remember a previous HMS Dreadnought, the battleship that changed the whole nature of sea power as far as capital ships were concerned in the years approaching the first world war. A famous naval arms race was going on between this country and Germany and, around 1909, there was a great deal of controversy that the German navy was drawing level with the grand fleet of the British Royal Navy in terms of dreadnought battleships. A public campaign was mounted, encapsulated by the phrase of the Unionist politician George Wyndham:

“We want eight and we won’t wait!”

My view, which I believe is shared by at least some other members of the Defence Committee, is that a new benchmark is perhaps needed for the percentage of GPD to be spent on defence: “We want three to keep us free!” In reality, if we go on at the 2% level, we are in danger of finding ourselves incapable of meeting the threats that face us today and will continue to face us in future.

--- Later in debate ---

[Patrick Grady (Glasgow North) (SNP)]

Thank you, Mr Bone. I will try to be as brief as possible because I also hope to catch the Chair’s eye in the next debate— I have half a speech to give because at first I thought there would be one debate.

Of all the Government’s commitments, we can point at and quantify two—2% of gross national income on defence and 0.7% on aid—and the others go up and down. The right hon. Member for New Forest East (Dr Lewis) appeared to imply that somehow that was a bad thing and that spending more on welfare than defence, showing compassion to the most vulnerable and needy in our society and providing that social security safety net of which we all ought to be so proud, was somehow at odds with finding the money we need to spend on the defence of the realm.

The right hon. Gentleman also spoke of investment, which I think is also quite important when considering the international aid budget. I would argue that spending money on international aid is an investment in our security and in our enlightened self-interest—helping to build a more stable and secure world by lifting people out of poverty and helping them get the food and education that they need.

It is particularly interesting that the 0.7% target, which admittedly was agreed some time ago, was based on a calculation of what was needed to meet the globally agreed goals for poverty eradication, including ending hunger, access to education and so on. I am not entirely clear where the 2% target came from. Is it a needs-based assessment of what NATO countries ought to be spending in order to effectively defend themselves or, as the report seems to say, a political target—an arbitrary amount? I think that has serious implications.

Even if we are meeting the 2% target, the key point I make is that there is a serious risk of conflation between those two targets. This might be a point of agreement: by definition, the double counting of money that is spent on aid and money that is spent on defence means the total amount of money being spent on each of those is less than it ought to be. That might be permitted under OECD rules, and sometimes there might be a good reason, but both the people who support the aid budget, like I do, and people who support the minimum defence spending target are effectively being short-changed by the Government’s practices in this regard.

There is also the question of what the 2% is actually spent on. I was in Westminster Hall not that long ago and was told that money could not be found for the Type 26 frigates, yet there seems to be a blank cheque for weapons of mass destruction on the Clyde. I have spent a lot of time in Westminster Hall this week discussing the Chagos islands and Libya, as has the Labour Front-Bench spokesperson, the hon. Member for Leeds North East (Fabian Hamilton). We heard a worrying amount of language that sounded an awful lot like old-style projection of power and a frankly old-style colonialist mind-set that belongs in the past. If the Government insist on setting these targets for defence spending and want to spend that, fine, but please spend it on what we need, such as modern counter-terrorism or conventional forces in places such as Fort George near Inverness, which is where I grew up. Do not conflate that spending with aid and do not waste it on weapons of mass destruction.