Defence Spending

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Rory Stewart (Penrith and The Border, Conservative)
I am well aware that my No. 1 obligation in my new role in the Defence Committee is to sit down quickly to let other people speak who know a great deal more about the subject than I do. I will therefore, very rapidly, give a sense of what the Defence Committee has been working on for the past 15 years directly relating to defence spending.

Over the past three or four weeks, I have had a happy time going through an enormous number of Defence Committee reports; as one can imagine, after 15 years they fill almost an entire room. The central theme in everything the Committee has done is to argue that defence spending should be determined, above all, by our assessment of the threats we face and the strategy we have to deal with them—that it is not good enough to base a defence strategy, or defence spending, on what we have spent in the past or on what kit we have had in the past that we wish to replace.

Over the past 15 years, the Committee has identified three types of threat: state-on-state threats, threats from humanitarian catastrophes, and threats from terrorists. Today, in 2014, we face all these threats simultaneously—in some cases, in a more extreme and aggressive form than we have ever seen them before. First, on state-on-state threats, there is Russia. I have here the Committee’s 2008 report, in which Mr Jones participated as a member, “Russia: a new confrontation?” As Hugh Bayley said, Putin’s actions in Crimea suggest a very dangerous type of threat—a type of threat that the Committee was beginning to point to in 2008 and has finally come to fruition. It is the threat, as proved in Crimea, of Putin’s ability to deploy unconventional measures almost without a shot fired.

This is traditional spetsnaz or GRU activity whereby he is able to annex part of a neighbouring state without the deployment of full conventional forces. Another type of threat is represented by last year’s so-called Zapad 2013 exercises, which suggested that Russia is practising an airborne invasion of the Baltic and is able to follow this up with a maritime blockade and the deployment of tactical nuclear weapons.

The second type of threat is evident in Syria, where the challenge of humanitarian intervention can be seen at its most extreme, with 150,000 people killed and millions of refugees created.

Thirdly, on terrorism, we face in western Iraq almost the sum of all fears from the past decade. We have there exactly the problem that the global war on terror was supposed to solve for ever: an entire territory controlled by a jihadist group that now, in Mosul, controls a city of 2 million people. Unfortunately, that represents a real challenge to the west.

The question is what we—Britain and our allies—can do and what additional resources we would require to deal with those three threats. If we look at it on the surface, we will see that it is pretty depressing. It does not seem, looking at it directly, as though there is much that Putin would be worried about if he was contemplating chewing off a corner of Latvia. We need to be clear about the decline in our capacity and planning over the past 20 years. We have not been exercising for this phenomenon, nor have we designed troops for it. The kind of man who likes to go fishing with his shirt off might well be tempted to try to humiliate NATO. The chance of that happening might be 0.1% or 1%, but it does not matter how unlikely it is: the question is whether we are ready to meet it. Do we have the kinds of plans in place to make that article 5 defence credible? In particular, when we talk about tripwires, do we have a population prepared to use nuclear weapons to support a NATO member state?

On humanitarian intervention in Syria, the entire debate in this House showed the problems of us responding to that situation. On the subject of terrorism, the failure, ultimately—four years later—of the deployment of more than 100,000 American troops and $120 billion of expenditure to achieve a lasting settlement to the Sunni insurgency in western Iraq suggests that we will face a very considerable problem doing it again.

Nevertheless, on the basis of my very early superficial reading of what the Defence Committee has been saying for the past 15 years, I would suggest that the answer, ultimately, is more hopeful. What the Defence Committee has argued again and again is that to answer these kinds of questions we need to begin fundamentally with strategy. That means that we as a country need, bluntly, to get more serious. We need to invest far more in our thinking capacity and to rebuild a hollowed out Defence Intelligence. We need to rebuild the hard questions that were regularly asked in NATO planning meetings throughout the 1970s, ’80s and ’90s.

We need to focus on where we have got it wrong. If we are to win the public back again—if we are to win back public confidence in intervention and action, which we must—we can do so only if we are honest about our failures. We will not be able to carry the public with us if we try to pretend that everything we have done over the past 15 years has been absolutely perfect and all gone swimmingly; that nothing is our fault, but the fault of the United States or the local government; and that Britain has no lessons to learn. If we take that attitude, we will not be able to carry the public with us.

We must focus on what we can do. We can address these threats. We showed for 60 years that NATO knows how to contain the kind of threat posed by Putin—we have proved it again and again, year in, year out, and it is the greatest achievement of our civilisation. We achieved that peace in Europe and we can do it again. We have shown—my hon. and gallant Friend Bob Stewart showed this in Bosnia—that we know how to do humanitarian intervention. We have proved it clearly and we can do that again—perhaps not on the scale of Syria, but that is not a reason for despair. Finally, on counter-terrorism, we have shown for the past 12 years that we have effectively prevented a repeat of a 9/11-style attack on the homelands of the United States or Europe, and we have done so without winning the counter-insurgency campaigns, creating rule of law and governance, or nation-building under fire.

As we go into the NATO summit, these lessons from the Defence Committee over the past 10 years need to be taken forward: investment in strategic thought; a focus on what we have got wrong and on what we can still do; and absolute leadership in NATO on the subject of the 2% spending. That leadership is essential to protect ourselves and to encourage other NATO countries to meet their obligations. Above all, we need a commitment to that level in order to show Russia that we are not bending or moving away and that we are determined to maintain the hard-won peace of the past 60 years.

If we can get that right and connect strategic thinking to defence spending, we can make this NATO summit in Wales a chance to say, finally, that Britain understands that if we cannot always do what we pretend, we can do much more than we fear.

Jack Lopresti (Filton and Bradley Stoke, Conservative)
I congratulate my hon. Friend Mr Baron on securing this important debate. It is always a pleasure to follow my hon. Friend Rory Stewart, who made an excellent speech. I want to declare an interest: I have served in the Territorial Army for a few years, and I am currently in the process of joining the Royal Auxiliary Air Force Regiment.

The year 2014 is one of commemorations, with the centenary of the beginning of the first world war and the 70th anniversary of D-day. In an increasingly unstable world, those commemorations are timely reminders that freedom is not free. This year, we have seen the results of Russian aggression in eastern Ukraine and the renewed insurgency in Iraq, and we are facing a growing threat from jihadists around the world. It is therefore more vital than ever to ensure that we spend enough on defence, and it is crucial to have the political will to defend our freedom and our interests. As the former US Defence Secretary Donald Rumsfeld has said,

“weakness is provocative. Time and again it has invited adventures which strength might well have deterred.”

It is not mere coincidence that after the US President failed to enforce his red lines in regard to the Syrian civil war and, specifically, the use of chemical weapons by

the Assad regime, we saw Russian aggression in eastern Ukraine a few months later, with the chaos and bloodshed that has followed. I believe that a major factor in the US President’s failure to enforce his red lines was this House’s refusal to back military action in Syria, and we all have to take some responsibility for that.

NATO is the cornerstone of British defence and security policy, and it is vital for our and our allies’ collective security, as hon. Members have said. It has secured the peace in western Europe for nearly 70 years. I want to make a few points about the importance of our allies’ defence budgets in relation to NATO. We expect—and we need to demand—that NATO members that want to benefit from the security of the alliance should fulfil their obligations on defence spending. In 2006, the member countries of NATO agreed to commit a minimum of 2% of their GDP on defence spending, as hon. Members have said. Such a commitment clearly indicates a country’s willingness to contribute to the alliance’s common defence efforts, and it has an important impact on the overall perception of the alliance’s credibility, so why, according to NATO figures for 2013, have only Estonia, the US and Greece—alongside the UK—invested 2% or more of their GDP in their defence budgets?

The combined wealth of the non-US allies, measured in GDP, exceeds that of the United States. Historically, the US has always spent more on defence, as we know. However, non-US allies together now spend less than half as much on defence as the United States. The US spent 4.4% of its GDP on defence in 2013. NATO members are clearly over-reliant on the US, which is under the same pressure as other nations to reduce its defence spending. US Defence Secretary Chuck Hagel has recommended that US forces should be shrunk by 13% by 2017. We know that the US is increasingly focused on the strategic challenge from the Pacific, and expects us in Europe to take more responsibility for our own defence.

Today, US defence expenditure effectively represents 73% of the defence spending of the alliance as a whole. I therefore agree that NATO is over-reliant on the US for the provision of essential capabilities, including intelligence, surveillance and reconnaissance, air-to-air refuelling, ballistic missile defence, airborne electronic warfare and carrier strike responsibility.

According to NATO figures this week, we in the UK put 2.4% of our GDP into the defence budget in 2013, even though our Government were faced with sorting out one of the largest fiscal deficits in our history. Along with France and Germany, we represent more than 50% of the non-US allies’ defence spending in NATO.

Given their strategic position and their 20th-century history, what is particularly surprising about NATO’s figures for the estimated spending on defence in 2013 is that Latvia and Lithuania, who joined NATO in 1999, respectively spent only 0.9% and 0.8% of their GDP on defence. Luxembourg, the home country of our friend Mr Juncker, is estimated to have spent only 0.4% of its GDP on defence last year; the figure fell from 0.7% when Mr Juncker became Prime Minister of Luxembourg to 0.5% when he left office. Other NATO allies that spend 1% or less of their GDP on defence are Belgium, Hungary, the Slovak Republic and Spain.

The NATO Secretary-General said in May last year to the European Commission:

“If European nations do not make a firm commitment to invest in security and defence, then all talk about a strengthened European defence and security policy will just be hot air.”

My right hon. Friend Dr Fox, the former Secretary of State for Defence, said in 2011:

“You cannot expect to have the insurance policy but ask others to pay the premiums.”

It is vital that all NATO members share the burden and responsibility of our collective security. We in the UK are playing our part in NATO and maintaining our commitment. I urge the Government, at a minimum, to maintain the GDP spend on defence and, as others have said, to increase it when the financial conditions allow.

Finally, two years ago I was privileged to be invited to the unveiling by the Queen of the Bomber Command memorial in Green park. My grandfather served with Bomber Command in world war two, first as a rear gunner and then as a navigator. I found one inscription on the memorial particularly poignant. It was a quote from Pericles:

“Freedom is the sure possession of those who have the courage to defend it.”

We must do so.

Several hon. Members:
rose—

Dawn Primarolo (Second Deputy Chairman of Ways and Means; Bristol South, Labour)
Order. We have four or five Members left to speak. Mr Brazier, do you wish to speak in the debate? I am sorry to ask, but it will affect my calculations.

Julian Brazier (Canterbury, Conservative)
I wish to speak if there is time, Madam Deputy Speaker, but as I did not put in to speak in advance, I will understand it if I am squeezed out by other people who did.

Dawn Primarolo (Second Deputy Chairman of Ways and Means; Bristol South, Labour)
I will set the time limit at six minutes. You will probably get six minutes, Mr Brazier, but it might be a little less. I will advise you when we get there. There is now a time limit of six minutes on all speakers to allow time for the responses.

Martin Horwood (Cheltenham, Liberal Democrat)
I welcome this timely debate. It is healthy that on a Thursday when there is a one-line Whip, there is such pressure on time because of the number of Members who wish to contribute. That reflects the importance of the subject.

As always, it is right to begin by paying tribute to the professionalism and courage of our armed forces and the sacrifices that they so often make. We owe them our thanks.

The world in which the armed forces and the British Government operate is changing. We have rightly talked about the changing nature of the threats, but another way in which the world has changed is that our financial resources are not as great as they were. I am sure that even Mr Baron understands that. He mentioned by how much China is increasing its defence expenditure. I quickly looked up the figures of the International Monetary Fund on gross government debt as a percentage of GDP. China’s is only 22%; ours is 90%. That is a risky financial situation and is one of the reasons why we must have good fiscal discipline.

Otherwise, we might end up in the same situation as some of our NATO allies. Italy’s gross government debt as a percentage of GDP is 126%. Greece’s is 158%. If they allow that to continue, we all know what path they will have to go down—they will have to cut all sorts of expenditure, not least defence expenditure. If I had to speculate as to why Greece is one of the few countries within NATO that is achieving the 2% target for defence spending as a percentage of GDP, I would suggest that it is less to do with skyrocketing defence expenditure than with plummeting GDP.

That is one reason why we have to be a little careful about using such absolute percentages. If we were spending just above 2% and we had a good year in which GDP grew unexpectedly, we might fall below 2% mathematically without cutting our defence expenditure. If that happened temporarily, we would all regret it, but we must not fixate too much on the absolute percentage. Nevertheless, I agree with the broad thrust of the many contributors who have said that we need to encourage other NATO partners, when they can afford to do so, to step up to the plate. I certainly agree with Jack Lopresti that we cannot guarantee that America will continue effectively to subsidise the defence of Europe. We have seen the risk of American isolationism in the past and it may well raise its head again.

I do not have much time to talk about how we can economise on our defence, but I emphasise that we are still spending £38 billion in 2014-15, giving us one of the best-equipped and most technically advanced military forces in the world. It is still arguably the fourth largest defence budget in the world—it depends on whose figures we use, but I think the worst estimate that I have seen is that it is the sixth largest, which is still substantial for a country of our size—and we are over the 2% of GDP target for NATO members at the moment. We are constructing the two largest aircraft carriers in the Royal Navy’s history, and we are planning a fleet of destroyers, a new fleet of both nuclear and conventionally armed submarines and, further ahead, the joint strike fighter and the Type 26 frigate.

That will all put intense pressure on our defence budget, so we have to consider ways in which we can make it more cost-effective. That is not just about budget cuts—it is a great tribute to the Secretary of State for Defence that he has put such emphasis on efficiency and better management. He may have been slightly disappointed not to have become Chief Secretary to the Treasury at the outset of the coalition, but the Treasury’s loss has been the gain of first the Department for Transport and then the Ministry of Defence. He protected investment in transport infrastructure, and he has been good at prioritising more efficient defence spending and procurement. Both the 2010 strategic defence and security review—the first for 12 years, it has to be said—and more recently the Defence Reform Act 2014 have emphasised the strengthening and reform of defence procurement, perhaps saving as much as £1 billion a year. That compares with the last year of the Labour Government—

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
indicated dissent.

Martin Horwood (Cheltenham, Liberal Democrat)
The shadow Minister shakes his head, but in their last year, the Labour Government clocked up a record overspend of £3.3 billion on the defence budget, which could not continue.

The best way to reduce defence expenditure is to reduce the need for it, and the current Government have signed up to the international arms trade treaty and have an important strategy of building stability overseas. Such things, which contribute to peacekeeping and the reduction of threats, are quite important, but inevitably we have to face up to some threats. It is right to look at Ukraine, and at Russia’s posture, and be concerned about it, and that should be reflected in our defence strategy. However, it is also right that we look at the different nature of the threat that we face now from that during the cold war. There is increasing need for flexibility and adaptability, and the Future Force 2020 strategy, with more emphasis on the reserves, is right. We can examine the potential for more co-operation with NATO and EU partners, and there are good models, such as Operation Atalanta, the anti-piracy operation.

Of course, I have to finish by pointing out that continuous at-sea deterrence, currently run in the same way as it was at the height of the cold war, offers some opportunity for savings. Only Liberal Democrats have really emphasised that opportunity, but I close by commending it to the Minister.

Richard Drax (South Dorset, Conservative)
I thank my hon. and gallant Friend Mr Baron for securing the debate and the Backbench Business Committee for helping in that regard.

I pay my thanks to, and express my huge respect and admiration for, our armed forces, who continue, as they always have, to serve this country with courage and dignity.

There is one thing worse than weak armed forces, and that is a weak economy, because without a strong economy we cannot have strong armed forces. I realise that, and it would be foolish not to. I pay my respect to my hon. and gallant Friend the Minister, who I know does not like sitting here listening to Back Benchers, certainly those on the Government Benches, talking about our armed forces—no Ministers do, because they, like us, want to support our armed forces. I am sure that, in their hearts, they would like to spend more money on them.

Expenditure on our armed forces must surely be a matter of priority. The priority for us in this House is the defence of our country, our island, our dependants, our people and our many responsibilities around the world. I will raise the elephant in the room—or one of them—which is expenditure on overseas aid. I totally support help for the third world and everything that it implies. Unfortunately, by setting targets for those things we tie ourselves to perhaps unreasonable expectations, particularly when our own country is suffering economically.

Bob Russell (Colchester, Liberal Democrat)
Does the hon. Gentleman agree with evidence given to the Defence Committee yesterday by a former distinguished military leader in this country who said that overseas aid assisted Britain’s defence commitments?

Richard Drax (South Dorset, Conservative)
Yes, I have heard that and I am sure there is an element of truth to it. I argue, however—I do not want to go too far down this road—that if a country cannot grow crops, for example, we should send them not billions of pounds but a farmer: we teach them how to do it. That is the way to help people help themselves. If we give them billions or millions of pounds, the money tends to disappear down a plughole or, worse, into some despot’s back pocket and a new fleet of Mercedes-Benz.

I wonder whether some politicians in the House—dare I say, perhaps the more modern politicians—really understand what our armed forces are about. I mean no disrespect to them, but they have not served. I do not say that because I and other Members of the House have served that we are any better, or even any better informed, but I believe we have an instinct—a gut feeling—that the armed forces in our country are the very backbone of the United Kingdom because of our history, and we ignore our history at our peril.

When I was serving in the 1980s we had the Falklands war. Many of my friends went down there and served with great distinction, as did they all. Expenditure then was more than 5% of GDP, and I understand we had more than 60 warships. Expenditure is now 2% of GDP, and we have 19 warships. I do not understand what has changed in the intervening years.

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
Technology.

Richard Drax (South Dorset, Conservative)
The shadow Minister says technology, and I agree that technology has changed. However, if we have one superb aircraft carrier and 10 Chinese submarines, and those submarines sink our superb aircraft carrier, we have nothing left. Technology is great, but it can be in only one place at one time, although it has a role to play.

Let me mention the list of responsibilities and wars that we have been involved in—I just literally scribbled them down. I asked what has changed, and my answer is “nothing”. The list contains Afghanistan, Bosnia, Iraq, Syria, Libya, Ukraine, Russia—as we heard from my hon. Friend Rory Stewart, Russia is flexing its muscles, not least in the northern approaches with its submarine fleet and in the air—as well as piracy on the high seas and the Pacific. We as a country have other responsibilities. Northern Ireland has not gone away, and—God forbid it ever happens again—let us not forget that we had 35,000 troops at the height of the troubles. The list goes on: Malta, Gibraltar, Cyprus, the Falklands, Belize, and now Kenya and getting our citizens out of that country if it implodes. We also have NATO commitments, aid to the third world and disaster relief. Those are just some of the vast array of the United Kingdom’s responsibilities.

We are a tiny country with a small budget compared with many others, but we have had and still have huge responsibilities because we stand up—as we have always done—for freedom, democracy and the rule of law. To do that we need some muscle behind us in the event it all goes wrong. As sure as eggs are eggs and history is history it does go wrong, and the Falklands war is a classic case in point. As I have said, we would be pushed to retake those islands were they to be taken now, with no aircraft carrier and no air cover.

I also wish to touch on rumoured reports on the cuts and expenditure. A report of 15 June commissioned from within the British armed forces shows that UK spending will fall to 1.9% in 2017, and 1.6% in 2024-25. Will the Minister assure me that that is not the case?

My father and grandfather served in the Royal Navy with great distinction. My grandfather would be turning in his grave. My father is not in his—a long way from it, God bless him—but he is certainly not a happy man. As Admiral Lord West said, the state of our Royal Navy now is a national disgrace. Freedom comes at a price and we must be prepared to pay it.

Several hon. Members:
rose—

Dawn Primarolo (Second Deputy Chairman of Ways and Means; Bristol South, Labour)
Mr Stewart, are you standing? The reason I ask is that you are on my list as wishing to speak, but I have not seen you standing. I want to make sure you get the opportunity to speak.

Bob Stewart (Beckenham, Conservative)
I am standing.

Dawn Primarolo (Second Deputy Chairman of Ways and Means; Bristol South, Labour)
Good.

Bob Stewart (Beckenham, Conservative)
Sigmund Freud suggested that denial can be a psychological defence mechanism by which a person, faced with facts too uncomfortable to accept, rejects them and instead suggests such matters are simply not true, despite overwhelming evidence to the contrary. I saw such denial when, as United Nations Commander, I reported genocide in Bosnia during 1992-93. Many international politicians preferred to ignore the clear evidence given to them and avoid facing up to the fact that something had to be done.

I fear the dangers of denial are at play once more. We are consistently reassured that our armed forces are operationally fit for purpose. They are not, despite the fantastic bravery, quality and efforts of our service personnel in their various ships, units and squadrons. It is now clear that the 2010 strategic defence and security review is not working well enough. It has gone wrong in some parts at least, yet the Ministry of Defence persistently maintains that all is well when it is clearly not. I am not being personal here. Friends of mine run the Ministry of Defence and I know them to be deeply honourable, patriotic and decent. I understand when they say they must listen to current advisers, not voices from the past or people who are not involved in defence directly. I might say the same if I was in their situation. I have never held high office, but I wonder whether people in such positions can escape the shackling political requirements of their responsibilities. In the MOD, for both senior civil servants and generals, I suspect it could easily be career suicide to suggest that a plan is going wrong. In the battle of Whitehall bureaucratic politics, it is always safer to give the boss good, rather than bad, news. As a military commander, almost every single plan I carried out went wrong from the start. Is it not a well-known military truism that plans do not survive contact with the enemy, and need constant tinkering and revision from the moment they begin? Have such adjustments happened to the SDSR 2010? I do not think so, but I urge that such adjustment is necessary.

Let me end by talking about what I think is the direst manning situation in our armed forces—within the Royal Navy. The Navy’s manning overstretch is manifestly affecting its operational capability. For instance, highly trained and highly motivated people are simply leaving the service, because in their view they have no choice. The 2020 plan for our Navy is that it should be about 24,000 strong, with two aircraft carriers and about 19 frigates or destroyers. Admiral Jellicoe had 80 destroyers at Jutland! In the circumstances, I just cannot see how we are truly going to be able to man, equip, sustain, protect and fly from one aircraft carrier, let alone two.

Last year, HMS Bulwark, second of the Albion-class assault ships and currently flagship of the Royal Navy, was on operational deployment for 272 days out of 365. When she returns to her home port, many in her crew are required to stay on board to carry out essential maintenance. I recently spoke to two female petty officers, both highly qualified and trained engineers aboard the ship. They told me that even when they were given leave, the chances were that they would be recalled, sometimes to fill crewing gaps in ships other than their own. They said they had very little chance to have a social life, let alone get married and have a family, which they both wanted to do. As a consequence, they had no choice but to leave the Royal Navy.

The Royal Navy simply does not have enough sailors for the commitments it has to fulfil. My firm belief is that the Navy must increase its size by at least 6,000 service personnel, putting it back to roughly the same size it was before 2010. The undeniable truth is that we are simply not spending enough on defence, and our sailors, soldiers and airmen are suffering in consequence. As one defence attaché put it to the Select Committee on Defence two days ago, in defence terms the United Kingdom wants a champagne lifestyle but has a budget only for beer. We not only have to sustain spending on our armed forces at 2% of GDP; we should increase it, if we really wish to have the very best sailors, soldiers and airmen in the world.

Oliver Colvile (Plymouth, Sutton and Devonport, Conservative)
Thank you for calling me to speak, Madam Deputy Speaker.

As I think everybody has said, defence of our country must be the No. 1 priority for the British Government. The use of the military is an important tool in finding political and diplomatic solutions. After all, when diplomacy goes wrong, we need to start using our military and some of its might.

In previous speeches I have paid particular tribute to our servicemen and women, particularly in my Plymouth, Sutton and Devonport constituency, which has 3 Commando Brigade, 29 Commando, the Royal Marines and, of course, the Royal Navy base that is the home to the refuelling and deep maintenance of our nuclear submarines. I remind the House that Plymouth, Sutton and Devonport continues to play a large role in defending our country. I also remind my hon. Friend the Minister that 25,000 people in Devonport’s travel-to-work area depend on defence for their livelihoods.

It is appropriate that we should be having this debate this month, because on 6 June we commemorated the D-day landings of 70 years ago, which saw the start of the end of the second world war. Today I would like to pay tribute to my uncle, Major John Majendie, who died at the age of 94 earlier this month. He served in the Somerset Light Infantry with the father of my hon. Friend Sir William Cash and regularly led post-war pilgrimages. Sadly, he died while preparing to make another pilgrimage to those battlefields.

In my SDSR submission, shortly after my election in 2010, I made it quite clear that, this being an island nation, the Government should focus on protecting our trade routes. Britain is our island story, and we expect our Royal Navy to perform critical humanitarian operations, as well as providing our nuclear deterrent. However, I should point out that although the Conservative part of the coalition Government is fully committed to retaining four continuous-at-sea submarines and the nuclear deterrent, the Liberal Democrats, I am afraid to say, are less happy with that.

To reduce the deficit, this Government had to take some difficult economic decisions. The last SDSR took place in that context, with every Department, with the exception of Health and of International Development, facing real financial cuts. My SDSR submission recognised that the Government had to work within a limited financial envelope, but I named spending on defence and long-term care for the elderly as my financial priorities. I argued in my submission to the 2010 SDSR that in order to do that, defence spending needed to rise to around 3% of GDP. Expenditure has hovered around 2% to 2.5% since 1997, which is surprising, given the significant amount of other stuff that our armed forces have been asked to do, in Iraq and Afghanistan, as well as Somalia.

I very much welcome the investment in new ships, with the Government’s decision to keep some of the Type 23 ships at Devonport, rather than moving them to Portsmouth. I also look forward to the completion of the two Queen Elizabeth class aircraft carriers, which I hope will be used, the six Type 45 destroyers and, most importantly, the Type 26 frigates, which I hope the Government will base-port in my constituency. I thank my right hon. Friend the Minister for making sure that since 1 April HMS Protector is base-ported in my constituency.

Looking at today’s security threats, I am pleased that investment is to be made in unmanned aerial vehicles and is set to increase over the next decade. Those have the capability to give us a powerful global defence reach at a considerably reduced risk to life. I urge the Government to put some effort and funding into cyber-warfare as well. There would be nothing worse than for one of our submarines or, more importantly, one of our aircraft carriers to be off some piece of land where somebody was playing around with the software in order to try to fire missiles, for example. It is imperative that the Government take this threat seriously and allocate sufficient investment to ensure that we are properly protected against cyber-warfare.

We need to make sure that when people leave the services, they go to another job. We must also make sure that we look after their mental health. It is incredibly important that when people transfer their skills, those are recognised in the commercial work space. My father left the Navy having been a lieutenant commander signalman, and he ended up by becoming the head of outside broadcasting for Rediffusion Television. That was possible in those days because the qualifications were fully recognised.

Earlier this month the Chancellor came down to Plymouth and looked at Hasler unit. I hope he learned some lessons and will include them in the autumn statement.

Finally, next Wednesday the Military Wives choir is coming here to sing in Portcullis House, and I would be grateful if the Minister and his whole team attended. All these things can ensure that we have that great Nelsonian tribute that used to be played on board ship. We need to make sure that we give confusion to the enemy and make that a reality.

Julian Brazier (Canterbury, Conservative)
I, too, congratulate my hon. and gallant Friend Mr Baron on obtaining this debate. I, too, believe that 2% is an absolute and probably inadequate minimum for defence spending.

It is sobering to think that exactly 100 years ago in June 1914 the eyes of this country were firmly fixed on the threat of civil war in Ireland. The prospect of a major war on the continent had crossed very few minds. Just a week before the Falklands war, most people in this country had no idea where the Falklands were on a map. Only three months before the war with Saddam Hussein, the Ministry of Defence had firmly ruled out the possibility of ever sending tanks into an operation outside the NATO area. So of all the threats that we appear to face, the gravest may be one of which we are barely aware. Given how many we face, that is sobering.

I make just three points, two of which are echoes of earlier speakers. The first is an echo of comments made by my hon. Friend Rory Stewart, the new Chairman of the Defence Committee, in an excellent speech. The man who had risen in just five years from being an obscure academic to become the youngest brigadier in the second world war was asked what he thought should be our highest priority when the Berlin wall came down and defence cuts were made. Enoch Powell replied that above all we had to keep the armed forces’ thinking capability—the ability to operate staff at the highest levels and the ability to develop doctrine together.

The point has already been made. It is critical. We must redevelop—because we have lost it—a facility that combines the lessons of history with the very good work on ongoing doctrine, and we need to make sure that we keep the Allied Rapid Reaction Corps headquarters and the other ones and that they are staffed not just by regular officers; as both Monty and Bill Slim said in their memoirs, we need a broader range of people involved in them.

The second point is an echo of the comments that my hon. Friend Bob Stewart put so well: the situation of the Navy is parlous, and rebuilding that, including maritime reconnaissance within the Air Force, must be the highest priority.

On the third area—the only one where I disagree with my hon. Friend the Member for Basildon and Billericay—I must respond to what was said about the reserve forces.

The practical fact is that modern regular manpower is very expensive. I suspect that all of us present in this Chamber want to spend more on defence, but when it comes to any affordable defence budget we must learn from our allies: America, Canada, Australia, even New Zealand have a much higher proportion of reserve forces.

This is not just a question of a boutique decision, and it is not just a question of the Army. America and Canada do not throw away the skills of pilots who have spent half a career with the regular armed forces; instead, those pilots go on and serve in the air guard or the auxiliary squadrons of the Canadian air force. Those countries thus get two bites out of the expensive costs they incur. Across all our English-speaking counterparts, a large proportion of the ground crews and others are provided by reservists.

Even more importantly, we are in serious danger after two deeply unpopular wars of losing public support for defence altogether. The only adult uniformed presence in 350 communities in this country is through our reserve forces. It is essential for us to build up this capability and its connection to the nation.

Finally, I am immensely proud of our forebears—we have heard plenty of examples of them from around the Chamber—who fought in the two world wars. I hope to God that my two sons in uniform will not face the same thing. The first duty of Government, however, must be defence of the realm. There is nothing magic about a particular number, but the strongest message the Prime Minister could send to the NATO meeting he will chair is that while he remains Prime Minister Britain will be committed to 2% for defence.

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
I thank the Backbench Business Committee for proposing today’s debate and Mr Baron for introducing it. We have heard 11 contributions on the broad theme of the level of defence expenditure, while some of the new and developing threats to our nation have also been highlighted.

The debate is timely in light of last week’s National Audit Office report on Army 2020. I have seen many NAO and Select Committee reports over the years, but I have to say that this one has to be the most damning and critical I have ever read. The report is important, because it sums up all the shortcomings that characterise this Government’s position on defence. It also shows how the Defence Secretary simply failed to do his basic homework when it came to the Army 2020 reforms.

On page 7, the report says:

“The Department did not test whether increasing the trained strength of the Army Reserve to 30,000 was feasible”.

On page 8, it says:

“The Department did not fully assess the value for money of its decision to reduce the size of the Army.”

On page 19, it goes on to say:

“The Department…did not have a mature workforce model or good data to help it accurately assess how long it would take to recruit the required number of reserves”.

This is not rocket science—these are basic things that the Secretary of State for Defence failed to do in putting forward this defence reform.

Is it any wonder, then, that recruitment to the reserves is stalling? As of April 2014, the trained strength of the Army Reserve was 19,400 personnel, which has actually fallen in number since the plan was announced in 2012. That means that the reserves have recruited 67% fewer personnel than was planned for at this stage, and it is clear exactly how that has been allowed to happen. A series of preventable IT blunders were made because Ministers failed to follow through on their contractual obligations to Capita, the company selected to manage Army and armed forces recruitment. As a result of that basic incompetence, the taxpayer has incurred additional costs of around £70 million, written off an extra £6 million and, on top of all that, is spending an extra £1 million a month until the problem can be solved.

Since his first day in office, the Defence Secretary has prioritised the Treasury bidding and the need to ensure that the MOD meets the Chancellor’s deadline for cuts above all else. It is clear, and the NAO confirms, that there is only one element of the Army reforms on which the Government are making steady progress. It will not surprise Members to learn that, according to page 9 of the NAO report,

“The Army is ahead of its target to reduce its military staff…and deliver the staffing savings required by its reduced budget.”

Last week 1,000 more servicemen and women were made redundant, in addition to the thousands who had already lost their jobs. If Ministers had put as much effort into the detail of the Army 2020 reforms as they are putting into the issuing of P45s, Army 2020 might not be in its present parlous state.

Paul Uppal (Wolverhampton South West, Conservative)
One sentiment has featured very largely in all the speeches that we have heard this afternoon. Obviously, much has been said about the 2% figure to which we aspire, but a deeper theme has emerged. It has been pointed out that modern politicians are often subject to short-term pressures, but these are, in fact, very long-term issues. I say that as someone who comes from a dual cultural background. When I speak to people in the east, they tend to say that we do not often have the stomach, the commitment or the long-term view to tackle these issues head on.

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
This is not about a long-term plan; it is about basic competence, which the NAO report has clearly called into question. The report warns that there are “significant risks” to the Army’s operational capability because of the Government’s incompetence in handling these reforms. That is why we have called on the Government not to proceed with their redundancy programme until they have seen evidence that the recruitment of reserves has increased enough to fill the gap.

Defence Ministers have developed a habit of returning to a small number of stock phrases and sound bites, usually when their record is under pressure, and I look forward to the Minister’s trotting out a few of them today. No doubt we shall hear—as this has been their mindset from the start—that the Government had no choice but to make these reductions, because they had inherited a £38 billion “black hole” from their predecessors. Let me, for the umpteenth time, quote from the National Audit Office’s 2009 report. It states:

“The size of the gap is highly sensitive to the budget growth assumptions used. If the Defence budget remained constant in real terms, and using the Department’s forecast for defence inflation of 2.7 per cent, the gap would now be £6 billion over the ten years”

—not the one year that has been cited by some Government Members. No doubt the Government do not want to talk about the fact that the “black hole” has now increased to £74 billion because of the 9% spending reduction in 2010. No one seems to know where they got the £38 billion figure. I suppose they think that if they repeat it for long enough, people will actually believe in it.

Remarkably, it was the former Secretary of State, Dr Fox, who first claimed, in September 2011, that he had eradicated the “black hole” in less than a year. Six months later, the present Secretary of State claimed that he had plugged the gap. Perhaps the Minister will tell us who exactly should be credited with this feat. Those two individuals have clearly missed their vocation: if they can make a £38 billion “black hole” disappear in less than 12 months, they should have gone to the Treasury rather than the Ministry of Defence.

At a time when the Government are sacking highly skilled, experienced and brave servicemen and women and scrapping key elements of defence equipment, Ministers must be honest with our forces and the public about why they underspent their 2012-13 budget by almost £2 billion. They also tell us that the UK still has the fourth largest defence budget in the world. That may be true, but we on the Opposition Benches believe such a statistic has little meaning if the allocated budget is not actually being spent, and it is on this count that the Government have failed spectacularly. They gave us aircraft carriers without aircraft. They scrapped the Nimrod programme when three of the aircraft were almost 90% complete, leaving the MOD reliant on Twitter to counter the maritime surveillance threat. They have also sacked regular soldiers before waiting to see whether increased reserve numbers would be able to meet the shortfall.

As the NAO report summarises, the Government

“did not fully assess the value for money of its decision to reduce the size of the Army.”

If the Minister reads the report, he will see that the fact of the matter is that recruiting reservists will be more expensive than having regulars, and that cost will have to be picked up by the Treasury some time in the future. I refer him to page 8 of the report if he wants to read that later.

It is clear that when deciding the future size of the Army, the Government decided on cost savings as their first principle, rather than any strategic underpinning of their decision. The NAO report makes clear on page 6 that

“The future size of the Army was determined by the need to make financial savings”—

an approach which has characterised the MOD under this Government.

Commentators and the Select Committee agree that, blindsided by the desire to achieve savings above all else, strategic considerations have been sacrificed in favour of reductions in personnel and capability. Unfortunately, some people are having to carry the can for this—unfairly,

I would suggest. The current Chief of the Defence Staff offered perhaps the most candid description of Army 2020 when he told the Select Committee on Defence:

“I remember the genesis very clearly. It was a financially driven plan. We had to design a new structure that included the run-down of the 102,000 Regular Army to 82,000, which is pretty well advanced now, to follow a funding line that was driven by the austerity with which everybody is very familiar…It triggered the complete redesign of the Army.”

Julian Brazier (Canterbury, Conservative)
I have written a reply to that report because I do not agree with it, but all the report says is that there are extra costs associated with recruiting for the next year and a half until the new system is in place, and it also queries some of the figures the MOD has put forward, but it nowhere actually suggests that a man or woman who is employed only for 40 days a year could cost more than a regular soldier. It—

Dawn Primarolo (Second Deputy Chairman of Ways and Means; Bristol South, Labour)
Order. This debate finishes at 5 o’clock on the dot, and we have not yet heard from the Minister.

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
The hon. Gentleman should read chapter 11, on page 8 of the report.

We believe the approach adopted is damagingly short-sighted and plays fast and loose with our nation’s security.

Jack Lopresti (Filton and Bradley Stoke, Conservative)
Will the hon. Gentleman give way?

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
I would do, but unfortunately I do not have the time.

Our approach is clear. Instead of having the Treasury-led SDSR conducted by this Government, we believe the UK needs a defence review that is genuinely strategic as well as financially viable. For us, these two factors are two sides of the same coin. This country needs an SDSR that provides strategic leadership and asks the most fundamental questions of all in terms of defence: what do we want our armed forces to actually do? As the shadow Secretary of State, my hon. Friend Vernon Coaker, outlined in his Royal United Services Institute speech, we have got to be ambitious, but we also believe that to withdraw from the rest of the world as though it is not part of our problem is neither desirable nor possible to achieve. We are also realistic and know there are no gains to be made from promises that cannot be delivered; we saw too many of those at the last election by the Conservative party.

It is only by asking these questions and delivering the strategic leadership this Government have signally failed to offer that we can do our armed forces and the British public justice.

Mark Francois (The Minister of State, Ministry of Defence; Rayleigh and Wickford, Conservative)
I congratulate my hon. Friend Mr Baron on securing this important debate. Seventy years ago this month saw the success of Operation Overlord. I take this opportunity to pay tribute to the allied forces who crossed the channel on D-day and who were quite rightly commemorated at events in Normandy recently. Not least of those was former Royal Navy Lieutenant Bernard Jordan who slipped away from his care home to join his former comrades, but thanks to a comprehensive information-operations campaign, assisted by the national press, he mitigated the potential wrath of both Mrs Jordan and his care home on his return. I am sure that the House will want to join me in wishing him well on his 90th birthday, which falls this week.

On Tuesday, I was privileged to attend a memorial service for those members of the 7th Armoured Brigade who lost their lives in their recent tour of Afghanistan, reminding us all in this House that our armed forces continue to exhibit the upmost courage and bravery on our nation’s behalf.

Finally on personnel matters, I understand that my opposite number, Mr Jones, is getting married next week. [Hon. Members: “Ah!”] I wish him all the best for the future, but I must caution him that this key decision may have important budgetary consequences in the long term.

Kevan Jones (Shadow Minister (Defence); North Durham, Labour)
It already has.

Mark Francois (The Minister of State, Ministry of Defence; Rayleigh and Wickford, Conservative)
Ha ha.

Having paid tribute to our personnel, both past and present, I wish to focus now on the Ministry of Defence’s capital programme, which is the largest in Government, accounting for some 20% of total capital spending this year. Our equipment programme comprises some £164 billion over 10 years, and is already published in our defence equipment plan. This will ensure that the Royal Navy continues to be one of the premier navies in the world by procuring and supporting, among other things, two new 65,000 tonne aircraft carriers, with HMS Queen Elizabeth, the first of class, due to be floated up next month in Rosyth; seven Astute-class nuclear attack submarines; six Type 45 destroyers, plus the beginning of the transition from the Type 23 frigate to the new Type 26 global combat ship, which will maintain a force of 19 frigates and destroyers, but with other surface warships as well, including a strong amphibious capability led by HMS Ocean. That amphibious squadron will be able, arguably, to transport the most effective maritime infantry force in the world, the Royal Marines, who celebrate their 350th anniversary this year.

Crucially, we are also making full provision for the successor deterrent system, providing the ultimate guarantee of our national security, and a re-elected Conservative Government will continue with that programme. In mentioning this, I pay tribute to all those who have supported the UK’s continuous at-sea deterrent and who have made sure that since April 1969 the Royal Navy’s ballistic missile boats have not missed one single day on patrol.

Turning to the Royal Air Force, we are investing to enhance the Typhoon via tranche 2 and tranche 3 upgrades to maintain its battle-winning edge, and to procure the new F-35 Lightning II joint strike fighter, placing this country as the only level 1 partner with the US in this key programme. We will further extend our global reach via a highly capable air transport fleet represented by the C-17 and C-130 aircraft, which are now being reinforced by Voyager, as well as the new Airbus A400M Atlas, the first of which is due to enter service before the end of the year. Combined, that will provide us with one of the largest and most modern air transport fleets anywhere in the western world. In addition, we have just taken delivery of the first of 14 new heavy-lift Chinook Mark 6 helicopters at RAF Odiham, which means that the UK has the largest Chinook fleet in Europe.

As part of the next strategic defence and security review, we will be examining the question of a maritime patrol aircraft to see what, if anything, can be done about this area of capability. We will do that as part of the SDSR, and I know that my hon. Friend Bob Stewart has taken a particular and longstanding interest in this subject.

As an ex-soldier, I should also add that we are ensuring that the Army remains well equipped. We will: upgrade the Warrior infantry fighting vehicle and also the Challenger 2 main battle tank; expand our fleet of battle-proven Foxhound armoured vehicles; upgrade our fleet of Apache attack helicopters; and procure the new Scout specialist reconnaissance vehicles.

Furthermore and importantly, we are significantly increasing our investment in cyber security—a point well made by my hon. Friend Oliver Colvile—ensuring that our armed forces are equipped with cutting edge capabilities across all environments. That investment is not only securing the best possible military capability, but helping to secure UK jobs and growth to help complement our long-term economic plan.

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