Defence

Toby Perkins Excerpts

Thursday 11th January 2018 Commons Chamber

[Vernon Coaker]

I could not agree more with the Chair of the Defence Committee. He is absolutely right. Sir Mark Sedwill says that the review is not defence-focused, but he also said to the Committee, if I remember correctly—he has certainly been reported as saying this in the media—that there is a need for us to increase spending on our cyber and intelligence capabilities. This is fiscally neutral, so where is the money going to come from? That is why we get the speculation about the cuts in defence capabilities to which the right hon. Member for New Forest East (Dr Lewis) refers. Because this is fiscally neutral, we are looking to take money from one thing to pay for another. The whole thrust of my argument is that if one thing is a threat and another thing is a threat, we do not rob from one to pay for the other—we fund them both because our country would demand that we do so.

[Toby Perkins (Chesterfield) (Lab)]

I agree entirely with my hon. Friend. With regard to many of the commitments that were made in SDSR 2015, the money that would be needed to deliver on all those does not match up with what has been allocated to defence in the Budget statements. We are already being promised a lot of commitments that do not bear any relation to the amount of money that is currently allocated to defence in the Budget.

[Vernon Coaker]

I agree. I will come on to the point that my hon. Friend has made very well when I talk about affordability.

--- Later in debate ---

[Dr Julian Lewis (New Forest East) (Con)]

I pay tribute to the hon. Member for Gedling (Vernon Coaker). Not for the first time, he has given great service to the cause of defence. He was an outstandingly good shadow Defence Secretary, and as long as there are people like him in the ranks of the Labour party the prospects for a bipartisan approach to defence remain excellent. I must extend that praise to all 11 Members from the four parties represented on the Defence Committee, every one of whom is strongly committed to the defence of this country.

Until recent years, little attention was paid to a possible threat from post-communist Russia, because for a long time after 9/11 counter-insurgency campaigns in third world countries were thought to be the principal role of the armed forces. However, we are now spending just £0.4 billion on operations of that type out of an annual defence budget of about £36 billion. According to the 2015 SDSR, that budget should by 2020 fund 82,000 soldiers, more than 30,000 sailors and marines, and almost 32,000 RAF personnel, plus another 35,000 reservists. To these must be added some 41,000 civilians, many of whom, like those who serve in the Royal Fleet Auxiliary, are service personnel in all but name. Finally, there are special forces, as well as new units that have been created to deal with cyber-security and counter-propaganda. Then there is all the equipment, which currently comprises over 4,000 Army vehicles, including tanks and artillery; about 75 Royal Navy ships and submarines, including the nuclear deterrent; and over 1,000 RAF fixed-wing and rotary aircraft. As a portent of things to come, the services also operate a mixture of large and small surveillance drones and 10 unmanned hunter-killer aerial attack vehicles.

All in all, we still have a fairly full spectrum of military capability, and in absolute terms—as I am sure we would all accept—£36 billion a year is a considerable sum. Set in historical perspective, however, that level of defence investment falls far below the efforts that we have traditionally made when confronted by danger internationally.

The Defence Committee published a report on defence expenditure in April 2016. Entitled, “Shifting the Goalposts?”, it attracted attention for highlighting the inclusion of costly items such as war pensions and MOD civilian pensions at a time when Prime Minister Cameron and Chancellor Osborne were scrambling to meet the 2% of GDP benchmark which, as we know, was set by NATO as a minimum—not as a target—for all its members. The Government were entitled to include such items in their 2% calculations, but they had never chosen to do so previously. It was therefore clear that by resorting to a form of creative accountancy, we were no longer strictly comparing like with like in overall expenditure terms.

Our report was especially revealing in its tables and graphs, which were well researched by Committee staff. They showed UK defence expenditure as a percentage of GDP, year by year, from the mid-1950s to the present day, and compared those data with the corresponding figures for spending on welfare, education and health. We found that in 1963 we spent similar sums—about 6% of GDP—on both welfare and defence. Now we spend six times on welfare what we spend on defence. In the mid-1980s, the last time we faced a simultaneous threat from an assertive Soviet Union, as it then was, and a major terrorist threat in Northern Ireland, we spent similar sums—about 5% of GDP—on education, on health, and on defence. Now we spend two and half times on education, and nearly four times on health, what we spend on defence.

At the height of the east-west confrontation, in every year from 1981 until 1987, we spent between 4.3% and 5.1% of GDP on defence. Between the fall of the Berlin wall in 1989 and the failure of the Moscow coup in 1991, the cold war came to an end. Consequently, and predictably, a reduction in defence expenditure followed. That was known as the peace dividend yet—this is the key point—even after it had been taken, and even as late as the financial year 1995-96, we were still spending not 2% of GDP, which is the NATO minimum, but fully 3% of GDP on defence. That was without the accounting adjustments that have been used to scrape over the 2% line in the past few years.

To sum up, from 1988 when the cold war began to evaporate, until 2014 when we pulled back from Afghanistan, defence spending almost halved as a proportion of GDP. Now that we face a newly assertive Russia and a global terrorist threat, the decision to set 3% of GDP as our defence expenditure target can no longer be delayed.

[Toby Perkins]

I have also looked at the statistics mentioned by the right hon. Gentleman, and he is absolutely right about the creative accounting. Even taking that into account, it seems impossible to reach the conclusion that we have ever spent as little as we currently spend on defence in comparison with our GDP.

[Dr Lewis]

That is absolutely right. It is a measure of how far downwards our expectations were managed during the reductions in percentage GDP spent on defence under the Blair Government and the Cameron coalition Government, that it was regarded as a cause for triumph and congratulation when it was finally confirmed that we would not be dropping expenditure below 2%. The matter had never been questioned at all prior to that period.