Ministry of Defence

Toby Perkins Excerpts

Monday 26th February 2018 Commons Chamber

[Sir Edward Leigh]

I put it to the Procedure Committee, and it recommended to the Backbench Business Committee, that we take on the role of determining estimates to be debated on estimates days. Scrutiny of the Government’s supply estimates was listed under “unfinished business” at the end of the previous Parliament. It is thanks to the current Committee and its Chairman, my hon. Friend the Member for Broxbourne (Mr Walker), that this business is no longer unfinished and we have now decided to debate estimates on estimates days. It is quite shocking how little power or influence the House of Commons has over spending in the estimates procedure, with a budget of some £800 billion a year. We have one of the best post-hoc systems in the world, through the Public Accounts Committee. We have one of the weakest systems in the world in terms of parliamentary scrutiny of what we are planning to spend, not of what we have spent.

Estimates days, as they have existed, have borne little relation to the actual content of the departmental estimates. Let me give a little bit of history, which is always interesting. This debate has gone on for quite a long time. In 1911, the then Clerk of the House, Sir Courtenay Ilbert, said:

“The sittings of the committee of supply continue through the greater part of the session, and, under existing standing orders, at least twenty days must be set apart for this purpose” .

Already, estimates days were just being used as a kind of general critique of government rather than actually to deal with what we were going to spend. Another report, in 1981, said:

“By 1966 there was a considerable discrepancy between the theory of supply procedure, under which individual estimates were put down for detailed consideration at regular intervals, and the practice, under which supply days were used by the opposition to discuss topics of their choice”,

which often had little, if anything, to do with the votes concerned. Indeed, the Clerk Assistant told the House that by the 1960s more and more supply day procedures had gone through which were “Little short of farcical”. I am glad that thanks to the Procedure Committee, and all the work that has been done and the debates that we have had, we are now going to talk about money.

However, given that the Government intend this parliamentary Session to last for two years, the already insufficient allocation of days for estimates days is doubly inadequate. Overall, in the past 100 years the House of Commons has delegated its role to the Treasury. We in this Chamber should be doing more. Why should we leave it just to unelected civil servants to debate what we spend and how we allocate spending among Government Departments? This House is asked to approve Executive spending even though we are not given much clarity about what that spending is expected to deliver, nor indeed the means to influence spending levels or priorities. As long ago as 1999, the Procedure Committee said that

“when motions are directed to future plans, motions recommending that ‘in the opinion of the House’ increases in expenditure or transfers between certain budgets are desirable, should be permissible.”

I believe that Select Committees should have stronger powers to investigate and scrutinise public spending. In Australia, Select Committees also sit as estimates committees, with Ministers and departmental body heads appearing before MPs or Senators to justify their spending. In other Commonwealth countries, quite a lot of work has been done on this. For instance, in several other countries with public financial management systems that are based on the British system, estimates include spending information at a programme level, with past spending information for each programme and medium-term estimates of the cost of the programme covering the Budget year and at least two further years. Good estimates help us to understand the link between Government priorities, desired impacts and the contribution of programmes to them.

There is still a lot of work to do. I would have thought that parliamentary scrutiny of the Budget was at the very heart of this body’s raison d’être. We have fought wars on this very subject yet are not particularly bothered by the comparatively little scrutiny we have of Government spending. Debates such as this one will, I hope, encourage broader participation of Members of this House in the formal budgetary process. We have a range of experience and points of view. I hope that this use of the debate to look at the Ministry of Defence estimates might also encourage us to have a more substantial debate on defence in general.

When I saw that at last we were going to get this estimates day debate, I approached my right hon. Friend the Member for New Forest East (Dr Lewis), the Chair of the Defence Committee, because I thought there was no better subject than defence to lead off on in discussing Government spending on an estimates day. That is why we are here, and this is a real opportunity. I will now talk a little bit about defence, although I recognise that there are people who are far more expert than me in this Chamber.

[Toby Perkins (Chesterfield) (Lab)]

I am grateful to the hon. Gentleman for giving way and thank him for achieving this debate. Is he surprised and disappointed that the Secretary of State is not here to respond? We are very much aware, through the press, that the Secretary of State appears to be pushing for greater budgets for the armed forces. It would have been nice if he had been here today to tell us all about the work he is doing.

[Sir Edward Leigh]

Well, I think it is very nice that we have such an impressive Minister as the Under-Secretary of State for Defence, my right hon. Friend the Member for Bournemouth East (Mr Ellwood), sitting in front of us.

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[Sir Edward Leigh]

Yes, I certainly think it should reconsider it. All the old, conventional threats are still very real and require conventional responses. We have to maintain our original capabilities while also expanding and improving them.

On the range of capabilities, last year Hurricane Irma wreaked devastation in the Caribbean, and HMS Ocean was a key element in our response to that tragedy. Now, apparently we have sold HMS Ocean to the Brazilians, but we have a proud humanitarian tradition on these islands and it is our duty to maintain it. This is not just about responding to threats; it is also about our humanitarian duty. We have direct responsibility for our overseas territories and bonds of close friendship with other members of the Commonwealth.

Ministers have so far refused to commit to keeping HMS Albion and HMS Bulwark, which give our armed forces an amphibious landing capability, as the hon. Member for Torfaen (Nick Thomas-Symonds) said in an earlier intervention. The hon. Member for Barnsley Central (Dan Jarvis) pointed out last month that

“40% of the world’s population live within 100 km of the coast”.—[Official Report, 11 January 2018; Vol. 634, c. 516.]

I voted against the Iraq war, but the fact remains that we made a very effective contribution with our amphibious invasion of the al-Faw peninsula in 2003. I may not always be in favour of using military options, but I want, and the British people demand, that we have as many options on the table as we can and that we maintain our capabilities.

Meanwhile, there are proposals to cut the Royal Marines, some of our most useful, well-trained, high-quality and greatly effective troops. The variety of roles they can undertake underpins the ability of Great Britain to project our military power. As I will mention in a moment, this has led to low morale and a culture of fear for the future in one of the most important and valuable parts of our military.

Then there is the Navy. I received an email—one of many that have been sent to many Members from all sorts of sources—from a former Army major, writing to me through “gritted teeth”:

“the area of defence that has been shockingly neglected is the Royal Navy. Put Trident to one side and disregard the vanity project that is HMS Queen Elizabeth and you have virtually no ships. The Royal Navy has to be the most important service for an outwardly facing island nation.”

I agree with that. In December 2017, all six of our Type 45 destroyers were laid up in Portsmouth, whether for repairs, equipment failures, routine maintenance or manpower shortages. The possibility of a significant crisis requiring a naval deployment catching us not ready is strong—too strong.

[Toby Perkins]

I am grateful to the hon. Gentleman for giving way again. He is absolutely right. In December 2017, not only were none of our destroyers out, but, as revealed by an answer to my parliamentary question, for the first time in history not a single Royal Navy frigate or destroyer was deployed overseas. That demonstrates powerfully the scale of the pressure on our Royal Navy and its lack of capability.

[Sir Edward Leigh]

That is a very good point and that was a worrying incident.

On recruitment and numbers, the Public Accounts Committee “Army 2020” report notes that

“the Army’s recruiting partner, Capita, missed its regular soldier recruitment target by 30% in 2013-14 and it recruited only around 2,000 reserves against a target of 6,000. A huge step-up in performance is required if the Army is to hit its ambitious target of recruiting 9,270 new reserves in 2016-17. The size of the regular Army is reducing faster than originally planned but the size of the trained Army reserve has not increased in the last two years because more people have left the reserve than joined.”

We have shifted from an emphasis on the Regular Army to one that includes a very strong Army reserve. All the same, we still need a Regular Army, but we are not meeting targets for that either. Our force strength numbers are not up to scratch. In April 2016, we were short by 5,750 personnel. A year later, that had increased to over 6,000. By August 2017, it was over 7,000 and the latest statistics available show our armed forces are short of their full strength by 8,160 men. The problem is getting worse.

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[Mrs Moon]

I intend to talk about the reserve bonus scheme in the next part of my speech. I am sure my hon. Friend will welcome that.

Part of the problem is that, despite the theory that employers would be willing, and even encouraged, to allow people to take their time to go to, for instance, the annual camp, it is not happening. As people are under pressure to remain in work and to retain their jobs, they are not willing to give those 27 days. They are not able to make that commitment.

Further inefficient costs to the Army reserve can be seen when we look at the “regular to reserve” bonus scheme and its failure to retain personnel. The scheme was introduced in 2013 as a way of enticing former regular soldiers to join the reserves in order to keep their expertise within the military and pass it on to the new reserves who were being recruited. We were retaining capability, and also using the former regulars to train the reserves. The incentive for ex-regulars to join the scheme is, again, financial: a £10,000 bonus is paid in four instalments, provided that they meet the requirements of training and attendance at each stage.

As of October 2017, 4,350 ex-regular soldiers have joined the reserves under the scheme. At first that looks like a good number, but the question is, how many have been retained? In 2017, only 480 of those soldiers achieved all four instalments, which indicates a dropout rate of 89%. I accept that that figure does not take into account the fact that entry into the scheme may be staggered over the preceding four years, but it none the less demonstrates that retention of ex-regular soldiers in the Army reserve is a problem.

I can give an example. An ex-regular soldier who turned up at my house to do a piece of work had signed up for the reserve bonus scheme, and had found that once he had left the military and started work, the pressures of civilian life—being back with his family and getting into the new job—meant that he could not retain the commitment that he had thought he would want to ease his transition out of the military and into the civilian world. These are men and women with vital knowledge and expertise who are used to military life. Their retention is vital, but even with that offer of £10,000, there is not enough to keep them and for them to commit to what is being asked. This further suggests that the current model of the Army reserve just is not working.

The situation looks bad on its own, but if the cost of the scheme is taken into account, it looks a lot worse. Breaking down the entrants to the scheme into their respective ranks and assuming this distribution follows through the key milestone payments, and using these elements and combining wages and bonuses, the scheme so far has cost just over £29 million, with only 480 soldiers reaching all four payments. I am sorry to bat on about this, and I know the figures are boring, but I am deeply concerned. We have a reducing capability in our Army. We have been sold a pup, with a promise that the reserves would fill a gap in the regular forces, but that is not happening.

Defence is an expensive business—there is no getting around that—but it is also a business in which we cannot afford to lose highly skilled and highly able individuals willing to give the time and effort to get through their training so that they are deployable. I know that many Members of this House, including the Minister, are eager to fulfil our commitment to them so that they retain their membership of the reserves and their employability. I honour, and express my gratitude for, the service of all those reservists, but are we getting value for money in a way that allows us as a country to have the forces that we need? It is my concern that we do not, and the MOD’s own figures suggest that the reserves model as it stands cannot provide us with the numbers we need.

The challenges and menaces we face are very real. Many of our platforms are not fit for purpose and the readiness of our forces is just not in place, and we have heard about the disastrous Capita contract. I appreciate that the Minister has apparently suggested that he will resign if the military is cut further, and I hope he does not have to resign, because he is a good Minister, whom we trust, rely on and respect, but we also need the Minister to hear the concerns that we are expressing.

None of us want our Army to be damaged. All of us know that our personnel can, when fully trained and fully committed, be some of the best in the world; that knowledge is shared across our NATO alliance. But we are getting weaker, and that is unacceptable. I call on the Minister to look at how we are spending in terms of the reserve forces.

[Toby Perkins]

My hon. Friend is making an important point about the numbers, but does she share my concern that a huge amount of experience is being lost from our military? There are people performing roles with a few years’ experience who would have taken 10 or 15 years to reach that position in the past, and the experience of many of them—excellent soldiers and sailors though they are—might come under pressure in the fiercest of circumstances.

[Mrs Moon]

My hon. Friend is right, and this is also making them so much easier to be bought off by companies who seek the expertise and qualifications they achieve in the military. They feel dissatisfaction when they see the forces they joined—particularly the Army—being hollowed out. That is leading many more to consider leaving.

I shall make one final comment. I have spoken to a young man who was working as a full-time reservist when I first met him. He has told me that a lot of his time as a full-time reservist was spent going out and trying to recruit. He said that one of the most frightening things was that so many of the youngsters he spoke to about joining the armed forces had no understanding of military life. They had no idea of what NATO stood for, for example. This is a wider problem that we as a country need to tackle. We need to get the message out about how invaluable our armed forces are and how critical it is that our young people should seek the life, the experience, the skills, the challenge and the satisfaction of a military career, whether as a reservist or full time.

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[Dr Lewis]

Yes, and I will come to the issue of how we can use the percentage of GDP to track what has been happening to defence in a moment. I hope that the hon. Gentleman—a former Defence Minister in the Labour Government, of course, and a very good one—will try to be non-partisan about this for the simple reason that successive Governments are responsible for what has happened.

What actually took place was, as has already been hinted at, something that has been going on over a very long period. Colleagues on both sides of the House have heard me recite this so often that I am afraid they might do that terrible thing and join in, singing the song with me. But I will just run through it again. In 1963, the falling graph of defence expenditure as a proportion of GDP crossed over with the rising graph of expenditure on welfare at 6%. So we were spending the same on welfare and defence—6%—in 1963. In the mid-1980s, as we have heard, we regularly spent between 4.5% and 5% of GDP on defence, and that was the period when we last had an assertive Russia combined with a major terrorist threat—the threat in Northern Ireland. We were spending at that time roughly the same amount on education and health. Nowadays we spend six times on welfare what we spend on defence, we spend four times on health what we spend on defence, and we spend two and a half times on education what we spend on defence.

We have to ask what we mean when we say that defence is the first duty of Government. If it is the first duty of Government, it is a duty that is more important than any other duty, because if we fail to discharge it everything else is put in jeopardy.

[Toby Perkins]

I partly take the right hon. Gentleman’s point, if he is looking back to 1963 and the role of successive Governments from then to now. But it is also true that there was a substantial cut in defence spending in 2010-11, which bears no relationship to what happened in the previous 13 years. If defence spending had carried on increasing in real terms from 2009-10 to the present, £10 billion more would be being spent on defence than is spent under this Government. That is a substantial change from this Government to the previous one.

[Dr Lewis]

I will not defend what happened in 2010. I was a shadow Defence Minister for slightly longer than the duration of the second world war in the years up to 2010, and I was told retrospectively that the reason I never became a real Defence Minister was that it was known that I would not go along with what they were planning to do. So I am not inclined to lay down my life for the Cameron-Lib Dem coalition of those years. I did not do it then, and I will not do it now.

Having said that, it is all part of a bigger trend, and I come back to my projection of the situation. At the end of the cold war, as we have heard, we took the peace dividend. We had the reductions, which were reasonable under the circumstances. But in 1995-96—the middle of the 1990s and several years after we had taken the peace dividend reductions—we were not spending barely 2% of GDP on defence as we do now, but we were spending fully 3% of GDP on defence. From then on it was downhill all the way—

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[Toby Perkins (Chesterfield) (Lab)]

The scale of the cuts we have experienced in defence are genuinely endangering our ability and the Government’s ability to protect our nation.

I maintain the point that I made earlier. It is tremendously disappointing that the Secretary of State is not here to respond to the debate. I take the Minister’s point about the fact that the Secretary of State is meeting the Prime Minister. I am sure she is a busy woman and he is a busy man, but, given how much we read about how extensively the Secretary of State is supposed to be lobbying for defence spending, it would have been good if he had been here.

I have been in the position of being on the Front Bench and having people complain about the fact that I am the one responding. It is meant as no insult to the Minister. In my opinion, he might make a better Secretary of State than the one we have at the moment, but I do not mean to undermine his career by saying so. I would prefer it even more if my hon. Friend the Member for Llanelli (Nia Griffith) was the Secretary of State. I say again, it would have been good if the Secretary of State had been here.

I repeat the point made by my hon. Friend the Member for Bridgend (Mrs Moon): it would be a tremendous shame if the Minister was forced into a position where he felt he had to resign because of the level of cuts to the Ministry of Defence. He would be a loss to the Government. I know how seriously he takes his position and what an agony it would be for him if he had to do so, so I hope he is not placed in that position.

The truth is that this Government have presided over the scale of cuts and over the failure of armed forces recruitment that we have seen. The Government have presided over huge cuts—[Interruption.] The Secretary of State’s arrival shows the power of my speeches. Not only have the Government broken their 2015 manifesto pledge to retain a standing Army of 82,000, but we continue to see more people leaving the Army than joining it, and under this Government military housing is in a disgraceful state.

The Government have announced numerous unfunded spending commitments, which are estimated by the National Audit Office to have left a £21 billion black hole, and they have achieved their commitment to continue spending 2% of GDP on defence by including things that would never previously have been included. I have to say—I am sure my hon. Friend the Member for North Durham (Mr Jones), who was previously on the Front Bench, would repeat this with feeling—that if any Labour Secretary of State for Defence had presided over such a record, the right-wing press would be demanding their head on a platter in a way that defied anything previously seen in the press.

The moment is arriving when the Government must decide what their story is. We are hearing that the country faces very significant new threats. The scale of the threat from Russia has grown to its greatest extent at any time since the cold war. Brexit means that a not insignificant element of our key partners’ defence response will take place through an institution that we are no longer a part of. There is an urgent need to scale up our cyber and hybrid warfare capabilities. We have observed the extent of Russia’s upscaling of its capabilities, and we need to take action to ensure that we are responding. We are also seeing regular incursions by Russian aircraft and submarines into UK space, and an increasingly aggressive posture by Russia and Putin. If all those things are true—I believe they are, and we have heard from credible sources that they are—it is unconscionable for defence spending to have such a low priority in the apparent strategic approach of the wider Government.

As my hon. Friend has said, the roots of the current defence spending crisis lie in the disastrous 2010 SDSR, and the Government must be held to account for their performance. The real-terms funding cut in the departmental expenditure limit since 2010 is almost £10 billion. As my colleagues have said, this is an extraordinary amount out of a budget that was about £40 billion back in 2010, and this at a time when inflation in defence equipment and skill shortages have grown substantially. It is therefore impossible to take seriously the suggestion that the Prime Minister is presiding over a Government who have our nation’s future safe in their hands.

I have long feared that the announcements made in the 2015 SDSR on future defence procurement bore no relation to the budgets set for it. I thought that the 2015 SDSR was a considerable improvement on what had gone before—that may be setting a low bar, but it was an improvement—and it is important to recognise that. However, if the budgets from the Treasury for the Ministry of Defence do not bear any relationship to what is promised, it is incumbent on all of us to highlight that. The NAO figures showing a £21 billion black hole demonstrate that I was right to be suspicious.

The Government should come clean. I am absolutely calling on the Government to bring forward more money, but if they are not going to do that—if the Treasury is not willing to come up with the amount required to fill the black hole—the Government must be candid with Parliament and with the people about which of the spending commitments made in the SDSR are not going to happen.

The Government will get so far in bridging the gap by putting off decisions and allowing timescales to slide, such as with the commitment on the Type 26s. There is now a commitment—or a theoretical commitment—on Type 31s, but I suspect the actual development of the frigate will continue to be pushed into the long grass. Each of these delays both undermines the ability of our armed forces to respond and increases the demand on the servicemen and women on the existing platforms.

I am immensely proud of the UK’s commitment to the aircraft carriers. They are a piece of collateral that the whole nation should take pride in. It was a really important announcement—initially by the previous Labour Government and subsequently by the coalition Government —to commission and then to build them. However, the scale of the current cuts calls into question the amount of resources required by the aircraft carriers. In 2009-10, when the idea was initially put in place to go forward with the aircraft carriers, the Government were spending, in today’s terms, about £45 billion a year on the armed forces. With a Government who are now spending £35 billion, it is a different decision, and it has to be placed in the context of the scale of subsequent Government spending cuts to the MOD.

The Government appear to have a strategy of not going forward with more Type 26 frigates, but of having a greater number of Type 31s instead. That means we will have less capable ships, but they can be in more different places at the same time. As I have said, this calls into question the amount of resources—both financial resources and personnel—that the aircraft carriers will be consuming. Whether the Government would have commissioned two aircraft carriers if the scale of the subsequent cuts had been known about at the time is an important question.

I asked the Minister for the Armed Forces a parliamentary question about the scale of current recruitment and retention performance, and almost all the major arms of the Army lost more people last year than they recruited. The Royal Regiment of Artillery lost 170 more people than it recruited; the Royal Engineers, 130; the Royal Corps of Signals, 270; the infantry, 750; and the Royal Electrical and Mechanical Engineers, 100. There was a similar picture for the reserves, which we were told would make up some of the deficit. In the Army future reserves, the Royal Engineers lost 50 more people than it recruited; the Royal Corps of Signals, 20; the Royal Logistic Corps, 200; and REME, 160. Right across the Army, more people have left the service than have been recruited.

This reduction is to an Army that is already significantly under the numbers promised in the Conservative party manifesto of 2015. I believe I am right in saying that a standing Army of 82,000 is no longer the policy of the Government, although they have never officially come out and said that. It is very clear that a significant commitment was made in the 2015 general election—it was a very popular commitment—and they should be held to account for delivering on it.

Soldier numbers in our Army, which were stable throughout the previous Labour Government—they actually went up during the last five years of the Labour Government—have fallen from 98,340 in 2010 to 73,870 now. It is interesting that while there has been a fall of 25% in the number of soldiers, there has been a fall of only 15% in the number of officers. It is an interesting development for a Government who pride themselves—or claim to pride themselves—on defending the frontline that we have seen a bigger decrease in the ranks than in the officer numbers, and that is significant.

There is clearly a significant funding element to the fall in Army numbers, but there are also a number of other reasons why they are in such a distressing state. Morale among members of our armed forces continues to be challenged both by the demands placed on them and by issues such as pay and pensions, the quality of housing and the number of times that they have to go repeatedly on different kinds of deployments because of the shortage in numbers.

There is also real fear among our armed forces regarding this place’s commitment to actually using the Army. Our 2013 debate about airstrikes in Syria, which was referred to a great deal in the response to the urgent question immediately before this debate, called into question this place’s commitment to keeping an Army and being willing to use it. I get a strong sense from my responsibilities on the armed forces parliamentary scheme that there are people in our Army who think it is legitimate to question what we in this place actually see as their role and our willingness to deploy them.

The right hon. Member for Rayleigh and Wickford (Mr Francois) made a strong point about the outsourcing partner’s performance on recruitment and demanded that it step up or ship out. He did not quite put it like that—I am paraphrasing—but he was absolutely right. As I have said in previous debates—I do not apologise for saying so again—it would be beneficial if the Government published the number of people in each constituency who are recruited to the armed forces, so that we can take pride in our constituents. That would also enable us to hold to account the outsourcing company for its performance with regard not only to the overall numbers that it recruits, but to where it is recruiting them from and the extent to which it is achieving its aims.

I thank the hon. Member for Gainsborough (Sir Edward Leigh) for introducing the debate. I say to the Minister and to the Secretary of State, who popped in but has popped out again—[Interruption.] I apologise: I expected him to be on the Front Bench. He has popped back, not popped out. I say to him that he can be absolutely certain that there is a real commitment among Members to strengthen his arm in his negotiations with the Treasury. We wish him every success and he can be absolutely certain that he will have our support if he is able to get from future spending reviews the resources that our armed forces need and deserve.

[Several hon. Members rose—]

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[The Parliamentary Under-Secretary of State for Defence (Mr Tobias Ellwood)]

It is a pleasure to respond to this debate. As others have done, I thank my hon. Friend the Member for Gainsborough (Sir Edward Leigh) and my right hon. Friend the Member for New Forest East (Dr Lewis) for securing the debate. I believe the Procedure Committee and the Liaison Committee were both involved in setting this new precedent for discussing estimates.

It is interesting that this debate was preceded by an urgent question on the situation in Syria. A number of options, ideas and proposals were put forward by Members on both sides of the House, and we should remind ourselves that we are able to make such proposals only because we have the hard power that allows us to stand up in this world. There is a question as to whether we use that hard power, but it does allow us to affect the world around us as a force for good.

In praising our armed forces, it is important that we pay tribute not only to those in uniform but to those who support them: the wives, the partners, the husbands, the children and the entire armed forces community. We, Parliament and the nation, pride ourselves on their incredible professionalism and sense of duty. They are among the best in the world—disciplined, reliable, committed, brave and very well equipped and trained—and we thank them for their incredible service.

The majority of people come out of the armed forces better for it, and our nation is certainly better for their service and for what they do in civilian life once their work is complete. It has been mentioned that we perhaps do not pay tribute to or acknowledge the work that is done across the world. Operations are taking place not just in the obvious—Iraq and Syria—but in Afghanistan and Africa. We are helping to stabilise nations, and we are helping those nations to become strong so that they can make a mark on their own future.

As we have heard today, the MOD budget sits at about £36 billion this year, and it will increase by 0.5% above inflation each year. We have the largest defence budget in Europe and the second largest in NATO, and we should remind ourselves that not all NATO countries are meeting the target. Fifteen out of 29 NATO members spend only 1.5% of their GDP on defence.

[Toby Perkins]

The Minister is right in what he says, so what pressure is the UK putting on those other NATO nations, both diplomatically and publicly, to get them up to the 2%? I would like to see a lot more done, when the Prime Minister is stood with other leaders, to put pressure on them to achieve that.

[Mr Ellwood]

I am pleased the Defence Secretary is in his place, because this is very much of concern to him, as it is to all of us in the House, and it gets raised regularly. The last time he was in Brussels he raised it, and our allies in the United States are concerned about it too. The hon. Gentleman raises a very important point. Let us be honest: we know that, for varying reasons, the financial year has been tough. We are grateful to the Treasury for recognising the fiscal pressures the MOD is under and providing an extra £200 million window to allow us to close the books on the financial year 2017-18. I make it clear that this is new money; it is different from the £300 million that has been brought forward to assist with the continuous at-sea deterrence programme.

Looking ahead, there continues to be a lot of debate, as has been expressed today, about the pressures on and size of the armed forces, their annual budget and the 10-year spending plan. I thought it would be helpful to place things into context following the defence and security capability review and the defence modernisation programme, and to flag up some realities that are not for this budget, but which are coming around the corner. The Defence Secretary has spoken of the need to look at outputs, rather than inputs. We must not just set out the number of tanks, ships or personnel that we need; we must first ask ourselves what we actually want to achieve. That leads us to determine the size of our armed forces and the defence posture we wish to show. This should reflect our duties, both domestic and overseas; our ambitions as a force for good; and our international responsibilities as a permanent member of the UN Security Council and lead member of NATO.

We also need to adapt to the changing circumstances, as the threats we face become complex and intertwined. We must recognise that the world has become more dangerous since the publication of the 2015 SDSR. The risks and threats we face are intensifying and diversifying faster than expected, hence the purpose of the defence modernisation programme. It will allow more time to carefully consider how defence works, as well as what defence needs; it will aim to improve how defence operates; and it will focus on achievable efficiency and create different arrangements with suppliers. This modernisation will allow us to take the necessary long-term decisions about our military capability.

For clarity, let me say that the defence modernisation programme consists of four workstreams: the delivery of a robust MOD operating model, creating a leaner and more efficient MOD; a clear plan for efficiencies and business modernisation; a study of how we improve our commercial and industrial strategy, building on, for example, the shipbuilding strategy and the recently announced combat air strategy; and a focus on our defence policy outputs and our military capability—arguably the most important of the four.