Defence Spending: Cross-party Talks

10. If he will make an assessment of the potential merits of holding cross-party talks on increasing defence spending to 3% of GDP by 2030.

At last week’s NATO summit all 32 nations signed up to a new defence investment pledge of 5% of GDP by 2035, including, for the first time, spending on national security, national resilience and homeland security. That builds on this Government’s £5 billion boost to defence this year, the funded and costed plan to hit 2.5% of GDP in two years’ time, and our ambition to hit 3% in the next Parliament.

There is a great deal of experience across these Benches, and most of us recognise the imminence of the need to hit 3%. My expertise is in force protection, and I know, among other things, that Brize Norton cannot draw support from the Military Provost Guard Service under the land top level budget, such as at nearby Dalton barracks and South Cerney. That is more acute still at RAF Lossiemouth. Will the Minister meet me to discuss the command structure of the MPGS and bring our experience to the table to find that 3% of GDP imminently?

My hon. Friend the Minister for the Armed Forces will be happy to meet the hon. Gentleman —he would be a much better person to meet than me on this matter.

I call the Chair of the Defence Committee.

UK defence companies need certainty from the Government in order to invest and plan with confidence. I welcome the Prime Minister’s recent efforts at the G7 and NATO summits, and his commitment to spend 5% of GDP on defence by 2035, including 1.5% on defence and security-related investment. Can the Secretary of State clarify how exactly that 1.5% will be measured? Will it involve new projects and investments, or will it merely be a reclassification of existing projects? Crucially, how can industry, public bodies and other stakeholders contribute so that they can help to achieve that goal?

My hon. Friend asks characteristically searching questions, so let me send him the NATO criteria that were published alongside the pledge last week, and let him and his Committee, when they interrogate me on Wednesday afternoon, pursue any further questions that they might have.

There are Members on the Government Front Bench who know a thing or two about leadership—I can say that with confidence, because the Prime Minister is not in that place. The Government have a commanding majority and do not need the support of Members from any other Benches to hit 3% of GDP, and further, if only the leadership of the Labour party could get its own Members of Parliament through the Division Lobby. Given that the Prime Minister shows no ability to do that with the changes to welfare, how will he ensure that 3% is spent on defence in a timely manner?

The Conservatives “hollowed out and underfunded” defence for 14 years—those are not my words, but those of the right hon. Gentleman’s former Cabinet colleague, Ben Wallace. This year there has been a £5 billion boost in defence spending, but in his Government’s first year, in 2010, there was a £2 billion cut in defence. Just as we boosted defence spending this year, we will increase it to 2.5% by 2027, which is three years earlier than the right hon. Gentleman argued for. We have shown exactly how we will fund that. We have taken the decision—which he did not take—to switch funding from overseas development aid into defence, and just as we have shown where the money is coming from in this Parliament, in the next Parliament we will do the same.

I, too, welcome the commitment to get to 5% of GDP on defence spending by 2035. It is imperative that the increase in defence spending means that funding is getting to those on the cutting edge of defence innovation. Cody technology park in Farnborough is already home to world-class defence innovation, with a wide range of small and medium-sized enterprises working there, alongside QinetiQ, and it is where DragonFire has just been developed. What role does the Minister see for existing places such as Cody, in delivering our defence industrial strategy? Will she meet me to discuss whether Cody could be the home for the new defence SME hub?

I see a huge role. I hope that my hon. Friend took the commitment that the Chancellor and I made, alongside the spring statement, to set a new target for direct defence investment in SMEs, as a sign of that commitment. While I am in the business of committing my ministerial colleagues to meetings, I know that my right hon. Friend the Minister for Defence Procurement and Industry would be only too happy to meet her and to draw on her expertise as part of the development of our defence industrial strategy.

I call the shadow Minister.

On defence spending, is not the truth that Labour’s promise to reach 3% of GDP, let alone 3.5% or 5%, is just smoke and mirrors, because there is no actual plan to pay for it? How can the Government claim that they will properly invest in our defence and keep the country safe when they cannot even deliver the limited savings they have promised on welfare? So I ask the Secretary of State: where is the money coming from?

I welcome the hon. Gentleman to the Dispatch Box and to the Conservative Front Bench team, alongside his two very distinguished colleagues, the right hon. Member for Rayleigh and Wickford (Mr Francois) and the hon. Member for South Suffolk (James Cartlidge). I gently say to him that, since the election, his colleague the shadow Defence Secretary argued 13 times for 2.5% by 2030. He only changed his tune after February, when the Prime Minister showed how it was going to be funded and said that we would do it three years earlier, in 2027. We have shown how we will raise the extra funding for this record increase in investment in defence since the end of the cold war. We have shown exactly how it is costed and exactly how it will be funded in this Parliament, and in the next Parliament we will do the same.

I call the Liberal Democrat spokesperson.

The Government’s commitment to reach 5% on GDP on defence spending is the right decision. As we face the once-in-a-generation threat from Russia, it is vital that we regenerate our armed forces after years of decline under the Conservatives. However, we need more urgency. The International Institute for Strategic Studies warns that if there is a ceasefire in Ukraine, Russia could

“pose a significant military challenge to NATO allies…as early as 2027.”

In order to strengthen our defence, we need to give people better incentives to join the armed forces. Will the Minister consider accelerating recruitment by backing the Liberal Democrat proposal for a £10,000 signing bonus to attract new recruits?

We are accelerating recruitment. We are dealing with the deep-seated and long-running failure in recruitment, because the previous Government, over 14 years, set and then failed to meet their own recruitment targets. We are dealing with the recruitment and retention crisis in the armed forces. I am proud to say that last year we gave the armed forces the biggest pay rise for over 20 years; that this year there will be another inflation-busting pay rise; and that we are starting to provide better pay, better kit, better housing and better support for forces families—the sorts of things that will keep those valuable and valued members of the armed forces serving our country and protecting us all.