Oral Answers to Questions

Rosie Cooper Excerpts

Monday 25th February 2013 Commons Chamber

The Secretary of State was asked—

[Rosie Cooper (West Lancashire) (Lab)]

1. What plans he has for the defence budget post-2015.

[Derek Twigg (Halton) (Lab)]

15. What assessment he has made of the likely defence budget post-2015.

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

The defence budget for the financial year 2015-16 will be set in the current spending round, which is expected to conclude in the summer. The budget for subsequent years will be set in the next spending review. The Ministry of Defence has an agreement with Her Majesty’s Treasury that we may plan on the assumption of a 1% real-terms annual increase in the equipment budget—about 40% of the current defence budget, rising to 45%—from 2015-16 to 2020-21. Our equipment plan, which we recently published, is based on that assumption.

[Rosie Cooper]

On 14 May last year the Secretary of State boasted that he had balanced the budget over 10 years. To prove his claims, he said:

“I have agreed with the National Audit Office that it will review the equipment plan and confirm that it is affordable.”—[Official Report, 14 May 2012; Vol. 545, c. 264.]

However, in January the NAO’s report damningly said that it could not

“offer a definitive view on the affordability of the Equipment Plan.”

Will the Secretary of State tell us how we can believe a word that this Government say on defence when their central claim to competence cannot be confirmed by the independent auditor?

[Mr Hammond]

I think the hon. Lady needs to go away and read the National Audit Office report carefully. To put it into context, she probably needs to read some previous NAO reports on equipment plans. For example, in its 2010 report the NAO discovered that in a single year under Labour just two programmes—Typhoon and the Queen Elizabeth-class aircraft carrier—rose by £3.3 billion in cost. In 2009, it said that

“the budget remains consistently unaffordable over the next ten years”

and that attempts to rebalance the defence budget had represented poor value for money. We are very happy with the NAO’s review of the equipment plan, which recognised the huge steps of progress that we have made and set out an affordability assessment model for the Department’s assumptions.