Defence Spending

I beg to move,

That this House has considered defence spending.

It is a pleasure to lead this important debate on defence spending, and to serve under your chairmanship, Mr Betts. I thank the Backbench Business Committee for granting us time to discuss the funding of our nation’s defence at a time when our world is more unstable than ever and detractors wish the western liberal way of life and our values harm.

It is rare for us to be able to discuss money in this place. Today, we must consider what value we place on our nation’s defence, how the huge sums of money allocated to it are used, the interconnectivity of the Foreign Office’s assessment of global instability, our world-class military tacticians’ understanding of how we can protect our citizens and allies, and what we need to have in place to do so. We need to understand why projecting our cultural and economic values and ethos, and promoting Britain’s and our allies’ economic stability and prosperity, is vital.

The question is: is a percentage figure the way to judge whether we are investing enough? We need to look ourselves in the eye and ask why there is so little appetite among politicians to invest properly in defence spending. The issue is simply not in our postbags. The NHS is now in receipt of a huge extra budget of £20 billion a year by 2024. The Prime Minister agreed to such an enormous increase because it was clear from the hundreds of colleagues who spoke up on the matter that their constituents had too much unmet need and that resources needed to be increased. We needed to address old age—that great success story of the NHS—and mental ill health, because we want a healthy and happy population, and we now realise that it makes economic sense. In wishing to improve the lives of our constituents, the Government assessed that a step change in funding was required.

Defence, on the other hand, does not feature in our postbags. Commanding officers are not allowed to talk to MPs about the problems they are experiencing, including a lack of investment in the sites that they manage and resources to support their serving personnel, who have no choice about their location and environment. There is no mechanism to share concerns about kit provision or whether we will be able to sustain a long conflict. Due to secrecy or national security, the politicians who should be speaking up about whether more investment in defence is needed have too few facts to assess the reality of the situation.

I congratulate the hon. Lady on securing the debate. Does she agree that this is about not just how much money is spent, but where it is spent? The national picture is one thing, but there are huge regional disparities in defence spending. For example, it is just £60 per head in Yorkshire, compared with more than £900 in the south-west. That obviously has a huge impact on the jobs that are supported in the defence industry.

I thank the hon. Lady for that point. It is important to look at how we spend that investment for UK prosperity. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) is nodding—he is thrilled that the south-west is doing particularly well out of the regional disparities. I agree that we need to think about how the funding is allocated.

In the busy life of a constituency MP, it is often too easy to assume that all must be well in our defence investment. Surely no Government would fail to meet their first duty of governing—to protect their people. When budgetary constraints are imposed, our military leaders cannot talk directly to MPs to tell them whether funding is getting to the frontline or into the investment paths that they need to deliver what we ask of them.

I congratulate the hon. Lady on securing the debate. I want to make a technical point about defence spend. We can spend now to save later, but I draw a distinction between capital spend and revenue spend. Everything I have looked at on defence spending in my short two years here suggests that the Ministry of Defence is not being very clever. Going down the capital route, rather than the revenue route, would be much more efficient in the longer term.

The hon. Gentleman pre-empts some of what I am going to talk about. He is absolutely right.

Our doctors and nurses tell us directly and bluntly if the funding systems for the NHS are not working properly so we can do something about it and advocate for them. However, that is not an option for our defence chiefs, so it is hard for us to know whether their resources would be sustainable and resilient if there were a major crisis. The question is not only whether enough funding is going into our defences but whether we are spending it correctly—a narrative that ran successfully after the strategic defence and security review in 2010, when the country was in dire financial straits and the former Member for Whitney had the unenviable challenge of trying to put it back on to a stable financial footing. SDSR ’10 declared—conveniently, perhaps, to match the financial crisis—that the Ministry of Defence, like other Departments, had to find efficiencies. There is no question but that that was the right thing to do.

First, I resent the use of the word “efficiencies”. Basically, that is Treasury speak for cuts, and it would not face up to that. Secondly, the hon. Lady is clearly under a misapprehension: the country was on a very steady path to reducing the deficit. Owing to the crash-and-burn tactics of Mr George Osborne, we went into a recession, which lessened the revenue coming in, deepened the crisis and worsened the deficit.

As ever, the right hon. Gentleman is a great defender of his party’s financial position. I would not choose to pick a fight with him, because he is a staunch defender of all matters defence.

I agree with my right hon. Friend the Member for Warley (John Spellar) on the use of the word “efficiency”. It is a fact—there is no reason to hide from it—that the Conservatives in the coalition Government cut the defence budget by 16%.

I thank the right hon. Gentleman for his comments.

The challenge is that the premise of SDSR ’10 was not just financial; it was that there was no longer an existential threat to the UK. It said that Russia was no longer a nation that we had to watch and fear. That has turned out to be a false premise, if it was ever anything other than an excuse to reduce defence spending. We were told that, owing to the sudden outbreak of global neighbourliness, we could return our Army from Germany. The freedom to move safely around international waters was assured because the middle east had become stable and unthreatening to the 20% of the UK’s energy requirements that travels by sea through the strait of Hormuz, so a reduction in the size of the ageing fleet was a perfectly sensible idea. Global airspace was going to be full of fluffy clouds and rays of sunshine, so there would be less need to patrol the skies or deliver force from the air to those who wish our allies harm, and we could reduce the number of airframes we would need. All that has, perhaps not surprisingly, turned out to be a false premise.

The Government seemed to make a conscious choice conveniently to forget that new equipment, recruitment and high-tech training takes time and money if we are to maintain our military advantage by having the best and most advanced equipment with the best-trained men and women in the world. I am afraid that SDSR ’10 was allowed to set out that false premise due to financial pressures. There was a realignment, as those in post realised that the position that was set out was not right. The work done for SDSR ’15 started to assess more honestly the instabilities across the globe and their risks to UK safety and prosperity, but the cash needed did not follow that strategic assessment.

It is a pleasure to see the Minister for the Armed Forces in his place; it is not him whom I challenge, but our Treasury Ministers. The pertinent question is, after setting out what was eventually understood to be required to meet minimum security risks in SDSR ’15, why have we not funded it properly to get the outputs that we know we need? We must be able to look our constituents in the eye and promise them that we can defend them. This is about not just the level of GDP that we use to invest in a larger force, but whether we are meeting future need.

The hon. Lady is making an excellent speech, and I congratulate her on securing this debate. Her point about through-life costs is very powerful. Does she agree that there should be more scrutiny—possibly independent—of the increase to the overall cost of projects caused by changes early in the cycle? I am, of course, thinking of the decision to delay the vote on renewing the deterrent submarines, which has added a significant amount of risk and cost to the project. Many of us said that to the Government at the time, but there was no ability to assess independently what the increased costs would be.

The hon. Gentleman’s point is well made. I will refer to submarines later. We need to challenge the Department continually on whether Committees such as the Defence Committee and the Public Accounts Committee, on which I sit, have the tools to look pre-emptively at the risks of those sorts of decisions.

There is also a mantra that technology is changing how we do everything and that it will, as if by magic, solve all challenges. It is implied that it will make everything cheaper, and that we can stop doing things the old way because there will be a whizzy, less manpower-hungry solution. Although it is true that world-leading UK defence businesses are creating extraordinary cutting-edge kit, that is not the only tool for solving our defence challenges. From Florence Nightingale and her medical advances to Alan Turing, the urgent need to gain advantage over the enemy has always brought out the brilliance of our citizens’ inventive genes. Defence has always been at the forefront of innovation because defence in action stretches human ingenuity under the insane pressures of war.

I congratulate the hon. Lady on her excellent speech. However, for industry to be able to respond, there needs to be an industry. That requires the British armed forces and the Treasury to put orders into British factories and British yards, rather than applying a model of international competition that takes no account of the prosperity agenda and no account of the long-term sustainability of the defence industry and its ability to innovate.

That question of sovereignty and the prosperity agenda—the third pillar of defence’s remit—is one we need to continue to challenge. As a Brexiteer, I am happy to say that I think we will have more authority to speak in how we choose to do that—

That’s not true.

Well, that is my opinion. Leaving the EU will give us more flexibility to bring the various parties together and will enable UK businesses, which are world leading, to make their case as effectively as possible.

The hon. Lady should not allow herself to be misled by Treasury-speak. In both European regulations and the Treasury Green Book, the Ministry of Defence has all the tools it needs to support British industry. The problem is a lack of will. It does not help to blame the EU. The problems are in Whitehall, not in Brussels.

I thank the right hon. Gentleman. The Minister will have heard his perspective.

One of the key issues for defence is its people, who are flexible, selfless, uncomplaining and serve willingly—indeed, alongside the Minister, who puts his life on the line to serve his country. Equipment changes constantly—if it did not, we would still be sending our Navy to sea under sail—but the quality of our people is always critical. We spend more than a third of our defence budget on people. I say that that is an investment, since they are highly trained and we invest in their training throughout their careers, in a way almost no other employer does. However, we classify them as a cost, so departmental behaviour fails to look after them—our human capital—as assets.

We would not fail to repaint a warship—clearly, that would make her less seaworthy or less capable of dealing with the scars of battle—yet we are perfectly content to fail to invest in the personnel who serve, by not looking after their families and by failing to demonstrate what the armed forces covenant should mean: that if someone has served or is serving, this country genuinely thinks they and their family should not suffer disadvantage. It is imperative that we change the financial models the MOD is allowed to use so that our human capital can be classified as an asset. Service chiefs cannot determine how to reward their personnel, because they are not allowed to use their budgets freely to maximise the benefit to their people and their service. For small change—in both senses of the word—the behavioural changes achieved by flexibility would be substantial and immediate.

I believe the reason change is not happening is that the Department and the Treasury fail to understand the nature of military preparedness, and do not seem to question our resilience if we need to put our military under pressure. Although we put kit that is small, plentiful, cheap and speedy to resource on to the soldier, we put highly skilled men and women, who take years to train, into equipment in the Royal Navy and the RAF that takes years to build. A modern warship or fast jet cannot be whipped up in a few months. It is at the mercy of international supply chains, the risks of which, as the right hon. Member for Warley (John Spellar) mentioned, perhaps are not properly understood.