[Relevant documents: Thirty-Second Report of the Committee of Public Accounts, The Future of the Equipment Plan, HC 716; Report of the National Audit Office, Investigation into military support for Ukraine, HC 230; Correspondence between the Chairs of the Defence Committee and the Committee of Public Accounts and the Permanent Secretary of the Ministry of Defence, on the Defence Equipment Plan, reported to the House on 12 March and 28 January.]
Motion made, and Question proposed,
That, for the year ending with 31 March 2026, for expenditure by the Ministry of Defence:
(1) further resources, not exceeding £28,705,830,000, be authorised for use for current purposes as set out in HC 871 of Session 2024–25,
(2) further resources, not exceeding £13,278,878,000, be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £36,416,759,000, be granted to His Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Maria Eagle.)
Let me begin by thanking you, Madam Deputy Speaker, Mr Speaker and the Backbench Business Committee for selecting this debate, which, if I may say so, is particularly appropriate in Armed Forces Week. Let me also thank the Minister and my hon. Friend the Member for South Suffolk (James Cartlidge), who is sitting on the Opposition Front Bench, for being here to listen to my speech. I hope the Minister will answer a few of my questions. I pay tribute to the hon. Member for Slough (Mr Dhesi), the Chairman of the Defence Committee, who would have joined me following our joint application for the debate, but his Committee has been away from Parliament on a visit.
The defence budget is one of the most important estimates that the House can debate and scrutinise. With war waging in Ukraine, the ongoing Israel-Gaza conflict and with what is now happening in Iran, our world feels increasingly unstable. The Prime Minister has recently returned from the G7 and is now at the NATO summit, ensuring that our interests align with our European, AUKUS and American allies, which is critical. As General Walker, Chief of the General Staff, said last July, we must be ready for war within three years, and the rest of my speech is devoted largely to that theme.
I wish first to discuss the figures in the defence budget. I think that most Members are pleased that defence spending is now considered a priority. The strategic defence review announced in early June was welcomed, and confirmed that defence spending would rise from 2% to 2.5% of GDP by April 2027, with an extra 0.1% going towards intelligence and security services contributions. There was a further commitment to increase defence spending to 3% of GDP in the next Parliament, but it has been noted that no date has been set so far. The new announcement by the Prime Minister at the NATO summit suggests that the Government will expect to spend 5% of GDP on national security and defence by the end of the next Parliament or by 2035, which includes 3% spent on core defence spending and 1.5% spent on resilience and security.
My hon. Friend mentioned the equipment plan; does he share the Defence Committee’s frustration that the last time anyone was able to scrutinise that spending was in 2022? Is he aware that when Lord Robertson came to the Defence Committee to discuss the strategic defence review last week, he was surprised that the Defence Committee was being denied access to the equipment programme—as indeed are the Public Accounts Committee—meaning that the Government simply cannot be held to account for what they are spending money on?
My hon. Friend has made the case eloquently, and I have also made it. The Minister will have heard and, hopefully, she might have something positive to say when she responds to the debate.
To what extent does my hon. Friend believe that the situation is even worse than he has outlined? Inflationary pressures bear far more heavily on defence than on, with the possible exception of healthcare, practically any other part of public spending, yet I see no evidence in the defence review or anywhere else over the past 12 months of that being properly accounted for by Ministers or those who advise them.
My right hon. Friend must have read my mind; when I come on to submarines, I will mention that very factor of inflation in defence costs.
The MOD is being reorganised into four sections: there will be a permanent secretary in charge of the Department; the chief of the defence organisation will be in charge of all personnel matters; there will be a new national armaments director in charge of all matters to do with procurement, digital and research, including all the matters to deal with what is now in the Defence Infrastructure Organisation; and there is of course the Defence Nuclear Organisation. This debate is focused on the national armaments director, whose appointment has been ongoing since it was announced on 17 December 2024. I am hopeful that the Department might soon be in a position to announce who they have selected to do the job, which I have to say is very prestigious and very large, with a very large £400,000 salary attached.
As I said, the national armaments director will be responsible for all defence procurement and all of the Defence Infrastructure Organisation, including defence housing, as well as digital and research. This represents a huge part of the defence budget. He will have significantly more control over the acquisition process than hitherto. I hope that some of the Government’s announcements will come to fruition, including that on reducing the time it takes to award a contract to a two-year maximum, which the Department hopes to do by involving industry at a much earlier stage in the process, to help to solve problems. Rather than over-specifying on requirements, this should streamline things and simplify the contracts. It should also allow our defence sector to export more equipment to the international market, which will in turn support even more jobs in the sector.
One contract that demonstrates the weaknesses in our procurement strategy was that for the Ajax armoured fighting vehicle programme, which was contracted to General Dynamics. The contract was the subject of many Defence Committee and Public Accounts Committee inquiries and of many urgent questions. It was originally contracted in 2011 for delivery in 2017, then deferred to 2020-21. As we all know, the trials were halted due to safety concerns, and the contract was renegotiated for 2024. Perhaps the Minister could tell us when all 180 vehicles will be in operation?
Would my hon. Friend comment on the Government’s enthusiasm or otherwise for the Haythornthwaite review of careers in the armed forces? It was put in train by and carried out under the last Government, but we hear tell that there has perhaps been some backsliding since. That is a pity, as Rick Haythornthwaite’s review was magisterial and had already shown signs, through zig-zag careers and the spectrum of service, of being appealing to servicemen and servicewomen, and holding them in—both in the regulars and the reserves. It would be a pity if that process did not continue on the basis of not-made-here-itis.
I cannot tell what is on the Government’s mind, but maybe the Minister will be able to tell us. However, given that the SDR makes it perfectly clear that they want to increase the numbers of our armed forces considerably, we have to consider every aspect of recruiting and retaining more. We must make sure that they do not just leave the Army or the armed forces as soon as they get particular skills. My right hon. Friend has raised a really important issue.
In conclusion, there is no greater duty on a Government than defending the nation, yet all Members of this House and the general public need to have confidence that our armed forces are properly equipped to do the job. That does not mean we can complacently give in to every demand, and it is the role of PAC members to carefully scrutinise the defence budget. Wasted spending and shortfalls are stopping our armed forces keeping us safe in the most efficient and effective ways. It is therefore imperative that the MOD releases more information on its finances in a timely manner, so that we can thoroughly scrutinise it and thus assure Parliament that our armed forces can do their job in the most effective way, with world-beating equipment.
It is welcome that this debate focusing on the remit of the national armaments director comes, as the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) said, as the Prime Minister attends the NATO summit, where we are likely to see greater focus and action on the need to increase defence spending. However, as this Government have said, this is not all about numbers on a spreadsheet or a press release, and the national armaments director will allow the UK to focus on how defence money is being spent to increase the lethality of our armed forces and ensure that the deterrent effect of the combined UK armed forces is sufficient to prevent a war that no one in this Chamber wants to see.
The position shows that our Government are delivering the change we promised: greater coherence and a strategic focus on our procurement and industrial planning, cracking down on waste and boosting Britain’s defence industry. I want what I am sure others in this House want, which is for us to move as quickly as possible, because only by doing so can we make sure our adversaries know that we are committed to our own defence. I want to raise three specific issues, and ask the Minister to provide clarification and assure me that these will be among the first priorities for the armaments director and, indeed, the Ministry of Defence.
First, looking at a globe rather than a flat map shows the strategic reality the UK faces as well as the importance of Scotland’s position. From the High North, Russian ships and submarines can threaten NATO, merchant shipping and, crucially, underwater cables in the Atlantic. The strategic defence review highlighted the need for
“improving NATO’s deterrence…in Northern Europe and the High North.”
Recently, NATO Secretary-General, Mark Rutte, emphasised
“a larger role for NATO in the High North.”
This very much makes the UK, and Scotland in particular, a frontline nation in combating Russian aggression. To do that, the SDR spoke of the need for:
Today this House is quite properly considering the scale and seriousness of the threats we face, from those requiring conventional deterrence in Europe to those of strategic competition in the Indo-Pacific. The case for strengthening our armed forces is not just compelling but essential. However, we must be honest about how we fund this renewal, and what we are willing to sacrifice to do so.
Let me be clear: the case for increased defence spending is self-evident. Like many others, I have long argued that we must invest more in our sovereign capability, critical munitions, advanced deterrence and national resilience, including by expanding both the remit and the resourcing of the national armaments director. The strategic significance of that role has grown substantially. In today’s volatile security environment, the national armaments director is not merely a procurement official; they are the principal architect of our defence industrial strategy, responsible for ensuring that our armed forces are equipped not just adequately, but decisively. Their portfolio spans capability planning, acquisition reform, exportability and the stewardship of our defence supply base, from the factory floor to the frontline. In an age of contested logistics, technological disruption and rapid rearmament by authoritarian regimes, the role is fundamental to preserving both operational readiness and sovereign capability.
Delivering a credible deterrent in today’s world means accelerating procurement cycles, building in modularity and adaptability, strengthening domestic supply chains, and driving long-term collaboration between government, industry and academia. It means ensuring that we can surge production in a crisis, replenish stockpiles at speed and invest in the innovation that gives us the strategic edge. That cannot be done in isolation or as an afterthought. That work must be led, co-ordinated and embedded across defence planning, not in spite of fiscal pressures, but because of them.
If we are serious about resilience, readiness and regeneration, we must empower the national armaments director with the authority, capacity and resources to act not simply as a technical overseer, but as a strategic enabler at the heart of defence policy. Only then can we translate increased spending into real-world capability, and ensure that British power is not only credible on paper, but deliverable in practice.
My husband was an Army reservist who served in Afghanistan. He has not told me a great deal about what his job entailed, but he has told me about taking flights in helicopters that hugged mountains on which the burned-out remnants of Soviet tanks stood ghostly guard; about his interactions with the people in the Afghan army and the civilians who worked with us; about buying bread from locals; and about visiting the children being treated in the hospital on the international security assistance force army base.
Our armed forces are the best in the world. That can be a throwaway phrase used by politicians, but it is one that I stand by, and I know that many families of our armed forces, both in Derby and across the country, stand by it too. As we celebrate Armed Forces Week in Derby, I will be thinking of them. It is essential that our armed forces have the kit, the arms and the technology that they need, and in my view, those who serve our national security by working in the defence industry and their families should have their contribution celebrated, too.
We are in a new era of threat that demands a new era for UK defence, so it was absolutely right for this Government to announce the largest sustained increase to defence spending since the end of the cold war, and to have already boosted defence spending by £5 billion this year. As the Government increase defence spending, they are making defence an engine for growth, boosting prosperity, jobs and growth in every corner of the UK.
Over the last few weeks, Derby has been mentioned many times in this Chamber. It is one of many cities benefiting from the Government’s commitment to defence and security, which is creating the skilled, secure jobs that we see in our city and across Derbyshire and the east midlands. Under the new defence industrial strategy, UK-based firms will be prioritised for Government investment, and that will drive economic growth, boost British jobs and strengthen national security. Under the last Government, small businesses often felt locked out of defence, and just 4% of Government defence spend went to small and medium-sized enterprises. The Government’s specific support will open the door to small businesses.
I have been banging on like a howitzer—well, maybe like a small-bore cannon—about the need to mobilise British industry as we ramp up for possible conflict in an increasingly hostile world. I welcome the news that the new national armaments director is being resourced to oversee the alliance between our military brains and brawn and the sinews of the British defence industry.
Civilians talk tactics, but veterans talk logistics, for old warriors know that a modern army marches not so much on its stomach, as in the days of Wellington and Napoleon, as on a very long supply chain, anchored mainly in small and medium-sized enterprises. That extends—to use the military’s favourite phrase—to all domains.
We have had recent sharp lessons on the reality of modern warfare, from the muddy hell of trenches in occupied Ukraine to the arid highlands of Iran. We have seen high-tech systems—drones, cyber, space and stealth—undergo a baptism of fire. We have also seen weapons that would have been familiar to my infantryman grandfather on the shores of Gallipoli in 1915 plying their old trade to deadly effect; artillery remains the queen of the battlefield. While our sailors, soldiers and aircrew are the tip of the spear, the essential shaft is our factories and shipyards, and every corner of the country can play its full part. I say “every part”, but there is bad news from Scotland under the yoke of the SNP, where the nationalists and their Green party fellow travellers have engendered a hostile environment for defence firms. We have seen young apprentices denied entrance to the Holyrood Parliament by an elected representative tipped to lead the Greens; and, in recent days, we have seen former First Minister Humza Yousaf—still an MSP—blundering around on the world stage, shroud-waving about it being a war crime to allow US military aircraft to refuel at Prestwick airport, and bemoaning the proscription of the saboteurs of Palestine Action.
There is a presumption, as we heard from the hon. Member for Dunfermline and Dollar (Graeme Downie), that the Scottish Government will not channel funding towards ordnance—a battlefield prerequisite. That has led this Government to step in and say that they will help to fund a new Rolls-Royce centre of welding excellence on the Clyde, which will be key to submarine and warship building.
I start by thanking everyone in our armed forces who serves, who has served, and who has fallen. Our country is safer and better because of their service.
In assessing the financial necessity of meeting our defence needs, it is important, first, to look at the state of our world—not only our real adversaries but our potential adversaries, our allies and the most powerful country in the world, the United States. In our country and across the world, there is an assumption that the foreign policy of the current President will be a blip, and I do not believe that to be so. For my constituents and for the House, it is important to reflect on that reality as the country and the Government set their path towards a long-term investment in the defence capabilities that we so desperately need.
The 2017 national security strategy of the United States, released by President Trump, said:
“After being dismissed as a phenomenon of an earlier century, great power competition returned.”
In 2022, the national security strategy released by President Biden said:
“The most pressing strategic challenge facing our vision is from powers that layer authoritarian governance with a revisionist foreign policy.”
In 2017, the era of co-operation, which had defined multiple US presidencies in the post-cold war era, was declared dead by President Trump. In 2022, the era of competition that had defined the Trump era was given new life by President Biden—two contrasting presidencies, two sides of the same coin.
As Russia illegally invaded Ukraine, a sovereign, democratic country, and China made clear its designs on Taiwan, a sovereign, democratic country, those two autocracies have deepened their ties, and they have collaborated more closely with other UK and US rivals. It is clear that the consensus that has been emerging in the beltway was accurate. The main priority of American foreign policy as great power competition is clear. The aspiration of the outcome that the US stays ahead of the pack is clear.
It is important that we bring the right scrutiny to our decisions and our defence strategy. It is important, too, that across the House we conduct ourselves in an appropriate fashion. In advancing our defence and security, with the decisions that are pursuant to that, the House should be united. Given the ways in which our society has been disunited, we need as a House to come together and find solutions in a cross-party way.
This year we marked the 80th anniversary of VE Day; 80 years have passed, but memory is not enough. Imagine a world without victory in Europe—a world where tyranny had triumphed and darkness endured. Now look at the world today—a world where autocracies dominate, divide and deceive, and where freedom is retreating. We all owe those who fought and those who fell more than remembrance, and we owe those who carried that loss nothing less than vigilance. That means vigilance against those autocracies and against the risk of misjudgment, miscalculation and misadventure.
All of us in this House have an important role to play in the defence decisions of this Government. That means being a strong democracy, cohering our society, strengthening the institutions of our state, growing economically, securing our clean home-grown energy, investing in new technologies and equipping our military with the tools and technologies that it needs. It means being a true ally and telling our allies around the world when things are not working. It means giving them reasons to listen by growing in strength and purpose. We must speak with the affection and wisdom of an old country that has known what it is to rise, to navigate uncertainty, to be attacked at home, to know the blessings of freedom being imperilled, and to decline from great power but none the less to work with allies and partners to secure freedom in our world against very difficult circumstances.
When I gave my maiden speech just under a year ago, I took the opportunity to express my frustration that the Government had announced a spending review that would essentially buy the political cover to get to a defence spend of 2.5% of GDP. The frustration I expressed was that the dogs in the streets knew that we needed 2.5%, and that we essentially wasted the best part of a year.
The evidence for that is clear to us all. Lord Robertson and General Barrons appeared in front of the Defence Committee when the Government kicked off the strategic defence review, and I said that when Lord Robertson had done his prior defence review, it was very clearly threat-based and foreign policy-led, whereas this one seemed to be saying, “2.5% is the answer, but now what is the question?”. It proved to be the case, because part way through the strategic defence review the Government asked, “What can you get for 3% by the next Parliament?”, and then they asked, “What can you get for 3% by 2034?”, and then, “What can you get for 3.5%?”. As the Prime Minister turned up at the NATO summit, we got the mystery bump up to 5% for defence and security. My suspicion, maybe slightly cynically, is that that 1.5% is made up of 0.75% smoke and 0.75% mirrors, but we shall see. It would be churlish of me, while defence expenditure is going up, to question it. I therefore think it is important to concentrate on how the money will be spent.
I remind the House of an exchange that took place at the Defence Committee the other day with the Chief of the Defence Staff after the publication of the strategic defence review. He said that we come from a position of strength and that this additional expenditure will simply make us stronger and more secure. I said, “I obviously did not expect you to know the answer to this question, but if I were to ask you, how many working tanks have we got?” He batted away the question in the following way:
“I suppose my caution on that would be that, while we are charged with the nation’s security and safety, it may be that having 50 tanks or 100 tanks is not necessarily going to be the defining factor as to whether the country remains safe. To me, that is the problem with those questions.
It is a privilege to rise on estimates day, during Armed Forces Week, an annual moment of national recognition for the extraordinary contribution of our armed forces, to speak about the importance of our defence industry. Across the country this week, from school assemblies to community events, people will quite rightly pay tribute to the men and women who serve our nation with distinction. I particularly reference my uncle, Donald Campbell, who died in 2016. He joined the armed forces as a youngster straight from school. He left aged 21 after a schizophrenic breakdown, which ultimately defined the rest of his life, but he, like so many veterans, remained extremely proud of his time in the Army and the role that he played, especially in Northern Ireland.
In my constituency, we will mark Armed Forces Week with Proms in the Park in West Bridgford on Saturday, and celebrate the two events. It will bring together families, veterans and the wider community to show their gratitude and support for those who serve. It is those local, heartfelt gatherings that remind us that defence is not an abstract concept; it is about people, communities and the security that we enjoy because of the historic and ongoing sacrifice of others.
In today’s estimates day debate, I will speak both to the reforms under way and to the Government’s broader vision for rebuilding Britain’s security and supporting jobs at home. As I said in a recent op-ed on defence to my constituents, we are now firmly in a new era for defence—one defined not just by increasing geopolitical threats, as has already been described by a number of Members, but by a determination to face them with seriousness, strategy and solidarity.
This Government have committed to the largest sustained increase in defence spending since the end of the cold war, already boosting spending by £5 billion this year and setting out a path to 2.5% of GDP and beyond. We have heard today about reaching 5% of GDP on defence and security by 2035, and it is important that this House can scrutinise the trajectory for getting to those targets.
Thankfully, this Government have already taken some shorter-term, practical steps that I welcome. They include awarding the largest pay rise to service personnel in 20 years; establishing the new independent Armed Forces Commissioner to improve service life; and spending an extra £1.5 billion, in a record uplift, to fix substandard forces housing. Just as importantly, we are thinking differently and changing how defence operates, ending waste, rebuilding capability and making defence an engine of growth across the country.
Does my hon. Friend agree that the new national armaments director should have as one of their priorities making sure that the welcome uplift in spending by this Government means that SMEs really get a fair share of that, and that that will do great things for constituencies such as my hon. Friend’s and mine, where there are many smaller and medium-sized businesses that seek to benefit from that process?
I was just about to get on to the fact that under the previous Government only two of 49 major defence projects were delivered on time, and SMEs have been locked out of that procurement process, so my hon. Friend is absolutely right to highlight the importance of changing that.
The new defence industrial strategy puts UK-based firms at the heart of procurement, ensuring that Government investment strengthens our national security and supports good jobs at home. That is great news for places such as Rushcliffe, as I said, given that it sits at the heart of the east midlands manufacturing base, which is home to firms in aerospace, engineering and precision technology, all of which are well placed to contribute to our defence future.
Importantly, not only will this new direction open the door to a better relationship with new businesses, but SMEs in Nottinghamshire will be able to be prime contractors, and it will make defence accessible, collaborative and responsive. We will be able to tackle long timelines, improve communication and, of course, invest in skills. As the Member of Parliament for Rushcliffe, I will continue to champion policies that bring jobs, investment and innovation to the east midlands. Defence must absolutely be part of that equation. Our region has a proud industrial heritage and a bright technological future if opportunities such as these are developed.
Finally, I want to return to where I began: our armed forces. All these reforms, strategies and spending commitments come back to them—the people we ask to defend our democracy, uphold international law and respond at moments of crisis. We owe them not just words of thanks during Armed Forces Week but action, investment and reform every week of the year.
This Labour Government are serious about defence and keeping Britain secure at home and strong abroad. After years of drift, we are delivering the long-term decisions needed to safeguard our country and support our communities. We are not just patching up a broken system; we are building a modern, resilient and forward-looking defence infrastructure, one that reflects the values of our armed forces and the aspirations of our country. I therefore welcome the steps the Government have taken to date and are taking through these estimates.
Today’s debate takes place at a moment of acute global instability, with war still raging in Ukraine, mounting threats from hostile states and an unreliable security partner in the White House. The world is more dangerous than it has been in a generation. In that context, the Liberal Democrats warmly welcome the Government’s commitment in February to increase defence spending to 2.5% of GDP by 2027. The Government’s subsequent commitment to a new NATO defence spending target of 5% is also the right decision. It reflects a recognition of the new threat environment that we find ourselves in and of what is necessary to support Britain’s long-term defence.
It remains the case, however, that the Government are still playing catch up on questions of the nation’s security. The last Conservative Government cut the Army by 10,000 troops, even as tanks rolled across continental Europe. That decision was staggeringly short-sighted and irresponsible. Despite that, this Government have dragged their feet on rebuilding the strength and size of our Army and have said that there will be no expansion to Army numbers beyond 73,000 troops until the next Parliament. In the context of the threats we face, that timeline can only be summarised as a day late and a pound short. The British Army remains one of the strongest deterrents we have—if the Government can commit to supporting its regeneration fully. While I welcome this Government’s shift in tone compared with the Conservatives, I urge Ministers again to commit to a much more rapid reversal of those troop cuts.
The strategic defence review mentions that there will be an increase in the size of the Army at some point if funds allow. Does my hon. Friend not agree that, now that we will be spending 3.5% of GDP on defence, we can accelerate that shift and grow the size of the Army now to provide that deterrent effect?
I agree with my hon. Friend that it would absolutely help our deterrence if we could increase troop numbers. The Liberal Democrats are calling for new bonus schemes to recruit and re-enlist 3,000 personnel, allowing the Government to reach their target of 73,000 trained troops as soon as possible, meaning that they can grow Army numbers further and faster beyond that in this Parliament. I encourage the Minister to consider those proposals.
I agree that we need an increase in troop numbers, but the challenge for any Government is not only setting the important policy, but saying how they would pay for it. I therefore invite the hon. Member to set out the Liberal Democrats’ plan for paying for her proposals. Please let her not say that it will be funded by a digital services tax, like all their other policies.
The hon. Member will know, if he has read our policies, that our proposal costs a maximum of £60 million, which is insignificant compared with the entire defence budget. Getting us to 76,000 as soon as possible will help us with deterrence.
The Government have promised a new defence investment plan for the autumn. That gives them a vital opportunity to provide clarity about how they will effectively address the ubiquitous shortage of equipment throughout the armed forces. However, serious questions remain about why they did not think it appropriate to develop and publish the plan, or a defence equipment plan, alongside the strategic defence review earlier this month. All efforts should be made to accelerate the publication of the plan so that parliamentarians can scrutinise the Government’s proposals at the earliest opportunity.
The threats to our security mean that the Government cannot afford to delay. With President Trump casting doubt on America’s commitment to NATO, the UK must lead in Europe. That means moving much faster to reach the new 5% NATO target than the currently proposed 2035 timeline, which would take us beyond the life of even the next Parliament. I therefore again urge the Minister to convene cross-party talks so that the whole House, representing the country, can together agree a pathway to the high amounts of defence spending that our security demands.
Our attention has turned this week to security crises in the middle east, but it is vital that we do not lose sight of Putin’s continuing barbarism in Ukraine. We are currently sitting on £25 billion in frozen Russian assets. Across the G7, that figure rises to $300 billion. I recently visited Estonia, and I cannot emphasise enough how strongly the Estonians urge the UK and His Majesty’s Government to develop plans on how best to support Belgium in unlocking those assets, and to lead from the front by seizing assets across the UK. Liberal Democrats again call on the UK Government to work with our allies to seize those assets and repurpose them directly for Ukraine’s defence and reconstruction. If Putin’s imperialism is to be stopped, we must act decisively and boldly now.
Will my hon. Friend join me in urging the Government to award the New Medium Helicopter contract to Leonardo UK in Yeovil, and to reassure us that a “defence dividend” will include supporting jobs, apprenticeships and the resilience of domestic defence firms across the south-west?
I know how important the defence industry is to my hon. Friend’s constituency, so I ask the Minister to consider that.
We would end the scandal of poor service housing by requiring the Ministry of Defence to provide housing above the legal minimum standards. No one who puts their life on the line for this country should live with leaks or mould. We would extend access to military health services to service families, improve mental health support for veterans, and tackle discrimination and harassment in the armed forces by fully implementing the Atherton review recommendations.
As the US has become an unpredictable ally, the UK has a greater responsibility to lead, to stand with our allies and to act decisively. We must now move faster to restore and grow our armed forces, reverse past cuts, and invest in the skills, infrastructure and sovereign capabilities that our military needs.
The UK must rise to the challenges of standing with Ukraine, securing our alliances, and building the resilience to protect our people in the face of a more dangerous world.
It is a pleasure to respond to today’s estimates debate on defence expenditure. I am grateful to my hon. Friend the Member for North Cotswolds (Sir Geoffrey Clifton-Brown), the Chair of the Public Accounts Committee, for securing the debate with the Backbench Business Committee, and particularly for timing it perfectly for the NATO summit and Armed Forces Week.
Given the threats we face from Russia and the instability in the middle east and elsewhere, it is welcome in principle that NATO states have agreed at this week’s summit to increase spending. Nevertheless, when we consider what the Government’s announcement means for UK defence expenditure, we must be clear that talk of 5% on national security and 3.5% on defence is nothing but a con. It is unadulterated smoke and mirrors when we need real investment at real pace to produce a real step change in our deterrence.
Consider first the promise of 5% on national security by 2035, consisting of 3.5% on the core defence budget and 1.5% on resilience and security. The Prime Minister confirmed on GB News yesterday that the 1.5% is already being spent. Not a penny of new money is being spent on actual military capability. As for the core defence budget, Labour has promised 3.5% in 10 years’ time, but the Chancellor of the Duchy of Lancaster confirmed on yesterday’s media round that there is no plan to fund that increase, and there will not be one until at least 2029. If there is no plan for 3.5% in the Parliament after next, what about a plan for 3% in the next Parliament? The authors of the strategic defence review wrote on the day of its publication, 2 June, that the decision to go to 3%
“established the affordability of our recommendations across a 10-year programme.”
The problem is this: the Government no more have a plan to fund 3.5% in a decade than to fund 3% in the years leading up to it. It means that the promises of the SDR were dead on arrival, and the headline pledge of “up to 12” nuclear submarines is a fantasy fleet based on fantasy funding. Most worryingly, the smoke and mirrors are not just being used for spending in future Parliaments. What I am about to say is subject to the caveat that in response to our written questions to the Treasury, it is simply not sharing with us the quantum of money that has been moved from the intelligence budget into defence. Nevertheless, as far as we can see, Labour is not going to spend the 2.5% that it promised for defence by 2027.
I thank all those who have spoken in the debate. I congratulate the hon. Member for North Cotswolds (Sir Geoffrey Clifton-Brown) on obtaining it, very properly in Armed Forces Week, to highlight some of the issues. I will try to answer a few of his questions. I have had an interesting read of the 32nd report of his Committee; he and I used to serve together on the Committee many moons ago, so I take PAC reports very seriously.
Although it is true that there has been no equipment plan for the last two years—during which time both Governments have been in power—because of some of the disruption around the election and the wholesale reordering of the way in which the MOD works, I recognise the fact that his Committee is not satisfied with the current state of affairs, and I agree that it cannot stay how it is.
Ministers are committed to increasing transparency, and I undertake to work closely with the National Audit Office and the hon. Gentleman’s Committee to try to work out a suitable arrangement going forward that they will be happy with. We are not seeking to undercut transparency or to fail to report properly to Parliament, so I hope that will give him some reassurance. Of course, we have only just received his report; I think we have a couple of months to ensure that we reply to its recommendations properly, and I will take an interest in ensuring that we do so.
I recognise some of the figures that the hon. Gentleman mentioned in his excellent speech. He asked where all the money is coming from—one or two others have asked a similar question, with varying levels of outrage. What I can say is that in this Parliament, we have already committed an extra £5 billion this year and resources to get up to 2.5% in the core defence budget—more than £10.9 billion extra in real terms. I do not think any of the Defence Ministers have turned up at NATO today with a fully set-out plan for getting to 5% by 2035. Each country has its own way of producing budgets and will do so over different periods, and I think it is quite reasonable for us to say that during the election we had a manifesto commitment to get to 2.5%, we have set out how we are going to do that and how we will pay for it. The hon. Member for Solihull West and Shirley (Dr Shastri-Hurst) said that he regretted the way in which that commitment is being paid for, but we have made that choice—difficult though it is—in order to make it clear where the money that we have committed to in this Parliament is coming from.
I mean, the right hon. Gentleman has only just walked in. If he wants to start heckling me, I am happy to have a discussion with him in the Tea Room afterwards, but there is no point in him heckling me from a sedentary position when he has not taken part in the debate. [Interruption.] It is very kind of the right hon. Gentleman to allow me to continue my speech. I am trying to answer questions posed by the Chairman of the Select Committee, whose debate this is.
We know that NATO will—as it usually does—check each nation’s spending against its expectations on a yearly basis, so that will be an obvious way in which we can see progress being made towards our goal. We will also continue to report, as ever, and I have no doubt that we will get to 3% in the next Parliament and that there will be a trajectory towards 5% overall, with the 1.5% security and resilience spending. Instead of making allegations about that commitment being smoke and mirrors, it would be better for the Opposition to say that they would do the same if they were in Government. If they did so, we would have a proper consensus to give industry certainty that this is what we are committed to do as a nation. I welcome the fact that the Liberal Democrats said that they would commit themselves to that goal.
I look forward to engaging with the Chairman of the Select Committee on the recommendations in the report, and I intend to make sure he is satisfied by what we come back with. He had some particular requests about Ajax—we all know that notorious name—including when the 180 vehicles would be delivered. The initial operating capability of Ajax will be by December 2025; I am hoping it might be sooner, but as far as I am aware, that commitment is on track and at least 180 vehicles will be delivered by that time. Morpheus and the broader land environment tactical communications and information systems programme has been a troubled programme in some respects. It is a £6.5 billion, 10-year programme. It involves lots of things fitting together, as the hon. Gentleman will recall. We are trying to make sure that the programme delivers what it is supposed to deliver.
The Minister must be a mind reader. Will she give us a timescale for when the new medium-lift helicopter contract will be awarded? I hope it will be awarded to Leonardo in my constituency.
I am not making any announcements today, but I have heard what the hon. Member said, and I want these matters dealt with more swiftly than in the past. He needs to listen out, because the announcement will come in due course.
We are undertaking this defence reform to make a real difference to acquisition and a real improvement to our procurement, to stop wasting money, and to get things into the hands of our warfighters faster. We can argue about money, as the hon. Member for South Suffolk (James Cartlidge) likes to, but we must do better with the money that we receive, because the money allocated to defence could be spent on other things—on hospitals, schools, and helping people with their needs at home.
We all accept that we have to show the public—the voters—that we are spending the money in a way that provides us with maximum value. I know that the Select Committee will help the Government to do that, and I am determined to ensure that we do it. That is what defence reform means.
The Minister mentioned money, and it is brilliant that she is engaging in that debate. I mentioned the 2.6% issue. This is very important; the pledge is for 2.6% of GDP by 2027. In written parliamentary answers, we are not being told what quantum of money will be added to the Ministry of Defence budget—namely, what the intelligence spend will be, and the spend on the Foreign Office items outside Chagos. Will the Minister tell what that quantum is, so that we know whether the MOD will really be spending 2.5% on the core defence budget?
What the hon. Gentleman said at the beginning of his speech was very simple, I must say. I understand the point that he has made, although I have not seen the answers to which he has referred, so I shall have to take his point away. I am happy to discuss it with him on another occasion, but I cannot give him an answer today.
I deliberately included a little bit about recruitment and retention in my speech. There will, I think, be a tension between the armaments director and the Chief of the Defence Staff over recruitment versus the budget for equipment. It is not possible to suddenly turn on the tap and recruit more people; it takes time. Can the Minister say anything today about when she will start to ramp up that recruitment?
A great deal of effort is already being made. Both the Minister for Veterans and People and the Minister for the Armed Forces are leading a number of efforts to improve recruitment and retention. As the House will know, in a “flow and stock” situation, it takes time to turn around a long-standing trend, and unfortunately the last Government did not meet the recruitment targets for the armed forces in any one of their 14 years. This is like turning around a supertanker. We have already made some reforms to try to speed up the time that it takes to recruit a young person who wants to join the forces, and that will start to show results in due course.
I am conscious that I am probably overusing my time, so I do not want to give way any more. I apologise, but there is another debate to come.
All of us in the House essentially understand the importance of increasing our defence spending in a way that is effective and gives us good value for money, so that we can boost the capacity of our armed forces to defend the nation and deter potential adversaries. I think we are all on the same page in that regard, and that is a good way for me to end my speech. I thank all Members for taking part.
I thank the Minister for that positive contribution. Twenty-five years ago, when we sat next to each other in the Public Accounts Committee, passing each other notes and holding the civil service to account, who would have thought that we would be in our respective positions now? I also thank my hon. Friend the Member for South Suffolk (James Cartlidge) for his contribution. In fact, I thank all Members for a very positive debate. We look forward to seeing positive results from all the requests that have been made today, and to working with the Government, while strictly holding them to account for all the promises that they have made.
Question deferred (Standing Order No. 54).
I ask Members to bear with me while I go through the somewhat complicated figures that this involves. In 2024, 1% of GDP was about £28 billion, according to the House of Commons Library, but hopefully our GDP will increase as the years go by. Members should note critically that a percentage increase in the budget is not the same as an increase in the percentage of GDP, hence the much higher figures that I am about to give. According to the Treasury Red Book, the current Ministry of Defence budget for 2025-26 is £62.2 billion, which is around 2.2% of GDP. For the Government to reach the needed 2.5% of GDP by 2027—setting aside the fact that the MOD budget does not quite align with the NATO-compliant spending—the defence budget must increase to around £70 billion in 2027-28. With the extra 0.1% that I mentioned earlier, the total is £72.8 billion. Therefore, another £9 billion to £11 billion needs to be found in the next two years.
If we are to reach 3% of GDP in the next Parliament, the defence budget will need to equate to around £84 billion in current prices. After today’s announcement, the equating figures are 3.5% or £98 billion on core defence and 1.5% or £42 billion on resilience, so the total spending by 2035 will need to be £140 billion. These calculations are dependent on the GDP staying the same and not increasing, in which case the budget will of course increase as well. I simply ask the Minister: where is all this money coming from? It is a huge amount of money.
Given the failure to produce the defence investment plan alongside the strategic defence review, the SDR is merely a list of ambitions and aspirations, with few receipts and invoices attached. When he gave the ministerial statement on the SDR, I asked the Secretary of State to confirm when we would be able to scrutinise the figures, but I understand that the defence investment plan is still an unfinished piece of work and is not due to be published until the autumn. That is a long way off.
I am Chairman of the Public Accounts Committee, which is always looking at how effectively money is spent, whether it could be spent more effectively to give the taxpayer best value for money, and whether spending is feasible. However, the Committee has not been able to fulfil its statutory role of scrutinising defence equipment spending for at least 12 months. The last defence equipment plan was published in November 2022, and it set out a 10-year spending plan for equipment procurement, costing around £305.5 billion. There was a £16.9 billion shortfall compared with the money that was then available.
I am pleased that the permanent secretary accepted the invitation to come to our Committee in April to discuss the equipment plan, but he did not come with any proposals as to how and when we might be able to scrutinise the relevant defence expenditure, to see whether the huge aspirations were affordable in the current budget, in the next budget of 3%, or in the following one of 3.5%. It is really important that Parliament has a timetable for when we can do that scrutiny.
General Dynamics was also awarded the infamous Morpheus battlefield radio system contract, which has cost £828 million so far. Will the Minister confirm that it is currently in the evolve-to-open transition partnership, and when its in-service date is likely to be? It was intended to replace the existing Bowman communications system by 2026, but that will now have to be extended with modifications to at least 2031, and possibly to 2035. That may leave a capability gap in our defence system. I think the whole House would appreciate an update on where we are with our tri-service battlefield communications system, and how it could be accelerated.
Another contract that should receive more scrutiny is the E-7 Wedgetail early-warning and control aircraft. Although the SDR says that we will procure further units, and share the costs with our NATO allies, the Pentagon has labelled the E-7 “expensive”, “gold-plated” and
“not survivable in the modern battlefield”.
Again, we would be grateful for further detail from the Minister on that contract.
As I said to the Minister in my question on today’s statement, I welcome the fact that the Government have committed to buying more F-35 aircraft—12 F-35As and 15 F-35Bs. The F-35A capability will be an alternative to our seaborne nuclear capability. Another huge commitment as part of the SDR is the one to invest in up to 12 new SSN-AUKUS nuclear-powered submarines. The submarines are due to be in operation in the 2030s and 2040s, with one being built every 18 months, but there are huge challenges ahead due to it being a new class of submarine and concerns with the lack of capacity at Barrow-in-Furness. No cost per submarine has ever been disclosed, and the programme is likely to take more than 10 years, so we really need to see some of the detail. Is the deal underpinned by the Government’s eventual commitment to increase expenditure to 3% in the next Parliament? We need to be able see whether it is feasible.
Speaking of long in-service dates, as I was in respect of the F-35s earlier—and the Minister agreed—we need to see the early work on feasibility and contracts beginning as soon as possible to meet the long tail into the buying, building and commissioning of the submarines.
This strategically important contract will, when costs are announced, need leadership from the national armaments director to ensure that it remains on track and on budget, unlike so many others before it. The Public Accounts Committee has asked for an update by the end of June 2026, which will demonstrate how well defence procurement has improved under the first year of the national armaments director group. The renewed focus on nuclear is important when looking at the ever-increasing nuclear enterprise budget. In 2024, the budget was £10.9 billion, which is about 18% of the whole budget. The 10-year defence nuclear enterprise costs have increased by £10 billion from £117.8 billion to £128 billion, and it is not clear whether the extra £15 billion announced in the SDR that has been committed to the warhead is included in that figure.
The budget is rising due to various factors, including technical factors, inflation, and the speed of manufacturing at which we now need to build these submarines to meet the timetable that is absolutely necessary for our defence. The budget is one of the few that is left unscrutinised due to the sensitive nature of these contracts, but as Chairman of the PAC, I am constitutionally obliged to see the detail. This needs to be resolved, and I am grateful for the commitment of the Secretary of State in working towards a solution. Sensitive scrutiny has never been more important, due to the context of the figures I announced earlier.
Defence personnel is another focus of the defence budget. The budget has had to increase by £14.3 billion to pay for the Treasury’s employer’s national insurance tax rise. The number of people leaving the armed forces is far too high. Last year, for every 100 personnel we recruited to the Army, we lost 130. This is completely unsustainable, especially as the SDR commits to increasing our armed forces to 76,000. The PAC recently held a session on cadet and reserve forces, and the SDR again clarifies that the Government want to increase the number of cadets by 30% and, critically, of reservists by 20%. Again, I would be grateful if the Minister confirmed how much that will cost.
We need to make joining the armed forces a much more attractive option than it currently is. Frankly, a prisoner would get better and safer conditions than some of the defence housing I have seen, much of which has mould, rust and leaks. This must change if we want to improve the retention and recruitment of our armed forces by giving them a better package of remuneration and conditions of service. I welcome the £1.5 billion to improve defence housing as part of the SDR and the £6.1 billion spent to repurchase 35,000 homes following the landmark deal with Annington Homes. This will allow the MOD to undertake major improvement schemes.
Another recruitment issue is the length of time it takes to enrol service personnel into training. We used to have an armed forces recruitment centre on every high street in the country. People could walk in off the streets, sign up and be wearing a new uniform within two weeks. There are now stories of recruitment taking well over six months, which is simply not good enough. We need to look further afield to ensure that the military has the right skills for the future. Cyber-warfare is becoming an increasing and real threat, and I believe the MOD could do more to recruit those with artificial intelligence and digital skills, but who would not necessarily meet the medical and fitness entry requirements needed for normal military personnel.
“An ‘always on’ supply line for shipbuilding”,
with the Royal Navy continuing to move towards
“a more powerful but cheaper and simpler fleet”.
The Type 31 frigates being built by Babcock at the Rosyth dockyard in my constituency would seem to fit the bill for that kind of move, along with providing the requirement for an “always on” supply of shipbuilding. The first Type 31, HMS Venturer, was recently floated off, and the other ships of the initial five ordered by the Royal Navy are progressing well. I will take this opportunity to once again thank the workforce at Rosyth for the incredible contribution they make to our nation’s defence in the construction of the Type 31, as well as the other incredible work they do for us and our American allies. Can the Minister confirm that the armaments director will urgently consider the need for more Type 31 frigates to reflect the flexibility of this platform as well as the lower cost and faster production that the incredible workforce at Rosyth have been able to deliver?
Secondly, there have been many discussions in this place, particularly those led by the hon. Member for North Durham (Luke Akehurst), on the need to improve the UK’s air defence capability. This has been a key theme of the ongoing Sky News podcast “The Wargame”, created by a range of defence experts and advisers. I have certainly been listening to it over the last couple of weeks, although I think I am a few episodes behind at the moment. Improving that capability will require a number of solutions in collaboration with NATO and other allies, but it has been suggested that the future air dominance system and Britain’s next-generation Type 83 programme could be part of countering the emerging threat from hypersonic missiles. With the increased prominence of this type of threat visible in both Ukraine and recent conflicts in the middle east, can the Minister please provide an update on those programmes and on how the armaments director is likely to prioritise this important work?
Finally, as part of our increased defence spending, it is vital that we make defence an engine for growth, boosting prosperity, jobs and growth in every corner of the UK. We are strengthening the UK’s industrial base to better deter our adversaries, and to make the UK secure at home and strong abroad. That means engaging all parts of society and business, including the growing network of high-tech small and medium-sized enterprises and skilled manufacturers in my constituency, in Fife, and across Scotland and the rest of the UK.
This week, we heard from the Secretary of State for Business and Trade about the exciting prospect of a defence growth fund, which could bring together different bodies to deliver on their combined objectives of economic investment and improved defence. In my area, that could include opportunities for Fife council and Fife college, both of which could play a much larger role in delivering on defence and providing the skills and training that our young people need and deserve.
I have raised this topic numerous times in this place. We have seen the total failure of the SNP Scottish Government on devolved matters such as skills and infrastructure spending. We have the farcical position that senior people in the SNP say that it is party policy that public money should not be spent on military equipment; and even more ridiculously, the SNP responded to a request for medical aid from the Ukrainian Government by dictating that the aid could not be used on military casualties, a preposterous view that is utterly detached from reality. That position puts Scotland’s security at risk, and reduces opportunities for young people in my constituency.
Will the Minister provide an update on her discussions with the Department for Business and Trade on the defence growth fund and how it will benefit people in Scotland—something that the SNP has failed to do so far? This Government have responded brilliantly to the global threats that the UK faces, building alliances and partnerships across the world, creating the national armaments director, and undertaking the reorganisation that we have heard about today and in previous statements. I just hope that we can accelerate down that path as much as possible, to ensure that we deal with those threats, as the British public expect us to.
However, this investment must not come at the expense of our international development commitments. Funding defence by slashing foreign aid is a false economy. Worse, it risks undermining the strategic posture that we seek to build. Aid is not an indulgence. It is not a soft option, and it is certainly not a luxury for easier times. It is an instrument of national strategy—a projection of British values, a tool of soft power, and a forward-deployed asset in the defence of the realm. When Britain pulls back from the world, our adversaries do not hesitate to step in. China in particular has understood this dynamic. It does not wait for crises to send in troops; it sends in investment, infrastructure and influence, often to the very regions from which we have retreated. When we reduce aid, we do not save; we cede ground and create vacuums that others are all too willing to fill.
Let us be frank: foreign aid and defence are not in conflict. They are complementary. One builds resilience, prevents crises and supports our allies; the other protects us as those crises unfold. A truly strategic posture requires both, because real security does not start when the first shot is fired. It starts in the classrooms of conflict zones, in the clinics of fragile states, and in the partnerships we forge before troubles take root. If we choose to retreat from the world, we shall find that the world does not retreat from us.
Derby has a large part to play in this, because we make things there. Rolls-Royce in Derby is known for having created the Merlin engine, first produced in 1936 and used in Lancaster bombers, Spitfires and Hurricanes, but we also have Rolls-Royce Submarines, which builds the nuclear reactors that power our at-sea deterrent. The UK’s submarines are the most awesome and lethal machines in the world’s history. I believe in the power of politics and the power of negotiation to preserve peace, which we all desperately want. However, we have to acknowledge that our submarines, with their sheer size and power, have spoken louder than words for more than 60 years, and they help to underwrite our security. We cannot wish away the threats that are growing; we have to deter them. Time and again, our Prime Minister has confirmed that security and defence are the first duty of Government, and that priority can be seen in the investment that is being made. From submarines to drones, Derby has a major role to play in supporting the Government in making and keeping Britain safe, so that it is secure at home and strong abroad.
The stakes could not be higher. Scotland is already a defence powerhouse. Umbrella body ADS estimates that 16,250 people in Scotland work in the sector, producing Royal Navy warships, cutting-edge radars, optronic masts—do not dare call them mere periscopes—for submarines and smart missiles such as Storm Shadow. Even my rural constituency of Dumfries and Galloway produces the helmets vital to the sensor suite on F-35 Lightning fighter bombers, of which we are purchasing 12 more nuclear-capable Alpha variants.
Figures from 2023 show that the Ministry of Defence spends £370 per person living in Scotland. It is—or ought to be—Britain’s arsenal, and as such, Scotland should be top of the national armaments director’s in-tray, yet firms wanting to set up the new ordnance factories recommended in the strategic defence review, or seeking to expand in order to fulfil new MOD orders, cannot count on financial support via the Scottish Government. Whose side is Scotland’s First Minister on? Will the Minister tell the House what powers the new armaments director will have to eliminate the Scottish Government’s reckless fifth columnist policies on defence?
We in this House will debate the motivations, character and behaviour of President Trump. They will be open to interpretation, but, in some important ways, his worldview has a more settled nature. With him and Biden as presidents and the United States as a great power pursuing US interests in a world where competition is the enduring and defining feature, our American ally has for some time now been telling a story about how it sees itself and the world, and we would be foolish to see the current presidency as a blip. It is the continuation of a tradition.
Of course, there are differences between the two presidencies: in their approach to diplomacy and how nationalistically it should be pursued; in their assessment of American interests and how aggressively they should be pursued; in their adherence to American values and how devotedly they should be upheld; and in sum, whether to collaborate with countries with which it has always collaborated, such as the United Kingdom, either as an end in itself—to reinforce and sustain an American-led order of democracies—or as a means to an important end, which is to pursue an economic strength and a national security that traditional democratic allies would seek, too.
The presidencies and presidents do not differ in their assessment of the international system and the need for competition. That is a critical point that will define UK defence decisions this year and in subsequent years. I obviously have a preference for a particular style of behaviour. I would much prefer President Biden’s form of foreign policy, but the outcomes that are being pursued are clear. This prompts the question: will whoever succeeds President Trump deviate from or continue his foreign policy? I argue that it will be a continuation.
If the priority of the US, our closest ally, is to stay ahead of those autocracies in the long term, and we have stronger ties and shared values with the United States as it becomes more competitive with those rivals, it is in our interest to do all that we can to counter the rise of those rivals, to mitigate against their worst behaviours, to minimise their risk to our security and to militate against their threats to our values—with the United States wherever possible, and with other democracies that make the same assessment of our threat. That is why it is so important that we invest in our defence capabilities.
We are making the largest sustained increase to defence spending. We have boosted defence spending by £5 billion this year, and we are committed to spending 4.1% of our GDP by 2027, and 5% by 2035. I commend that strongly given the international circumstances that we face. It is so important that we achieve that, and we must educate our constituents about why that is. In this House, it is important that we bring the right scrutiny to our defence decisions.
I come back to this: is our readiness at a level that we are playing our part, with our NATO partners, and achieving deterrence with Russia?”
Clearly not. He continued:
“Are we really confident about that?
The problem with a micro example is that it skips over what is fundamentally our security construct. We are a beneficiary of a collective group of nations in Europe. Never mind our 50 tanks or our modest increase in the Army; they are increasing their armies by tens of thousands and they are increasing their tanks by hundreds.”
If that is the attitude the Minister is getting to our having very few working tanks, she should be wary of the voices she might be getting from certain parts of the Ministry of Defence. I think that she and the Prime Minister would like some options beyond simply reaching for the nuclear button; there needs to be something in between. I hope that she will take that forward in her conversations with the national armaments director on their priorities.
I asked the Minister when we were discussing the national armaments director whether the director would have free range to tear up the book on defence procurement. The book certainly needs tearing up. I speak as someone who, as well as serving on the frontline on four tours of Northern Ireland, the first Gulf war, the second Gulf war, Afghanistan and Sierra Leone, managed to squeeze in about five years in the Ministry of Defence. I am sure the Minister is aware of the conspiracy of optimism in equipment planning, where people in uniform will tell part-truths about how much things will cost to get them into the programme—it is called entryism, and it has been going on for years—and then, all of a sudden, those same people will come back and say, “Minister, I am afraid our aircraft carriers won’t cost the £2 billion we told you; they will cost £6 billion. But what are you going to do? You’ve already announced them, and anything else will cause you huge amounts of political pain.”
I urged the Minister to tear up the rulebook, and she gave me a positive response: the national armaments director will indeed be earning their salary. The Chairman of the Public Accounts Committee said it was £400,000—I think that he or she will be on a potential £600,000 with bonuses—but they have got to be worth that. They must have free range to tear up the book. As a member of the Defence Committee, I do not want them giving us evidence a year after their initial appointment and saying, “I wanted to change things, but they just would not let me.”
This is my final point. Alongside the appointment of the national armaments director, we have defence reform going through. It was telling that when Lord Robertson and General Barrons came back to the Defence Committee having published their SDR and I asked them about the culture change required in the whole of defence reform, Lord Robertson told an interesting story. When Colin Powell moved from uniform to politics and was asked, “How do you bring about a culture change in an organisation which has gone in the wrong direction?” General Powell said, “Well, how do you stop a column of ants? You stamp on the first 10.” The Minister needs to prepare herself for some seriously robust conversations with the Ministry of Defence if money is to be spent wisely and honestly on things that go bang and bring about the effect—not just the input—that we all desire.
That is particularly notable in my constituency in the south of Nottingham. Many of my constituents work for Rolls-Royce and on their behalf, I welcome the £9 billion Unity contract announced in January to design, manufacture and provide in-service support for the nuclear reactors that power the Royal Navy’s fleet of submarines. Like my hon. Friend the Member for Derby North (Catherine Atkinson), I also welcome the confirmation that Rolls-Royce will receive £2.5 billion to produce the first small modular reactor, which is key to our energy security. Both announcements are good news for thousands of people in my region of the east midlands, who will be part of the supply chain for those two iconic developments.
We cannot confront 21st-century threats with 20th-century systems. The hard-fought lessons from Putin’s illegal invasion of Ukraine remind us that a military is only as strong as the industrial and technological base that supports it. That is why I applaud Ministers and civil servants for their work on the strategic defence review and the defence reform programme. At the heart of those reforms is the creation of a new national armaments director to lead a unified group responsible for procurement, research, support and innovation. That is a long-overdue development.
We also need a strategy that looks beyond the battlefield, because supporting our forces must mean supporting our veterans, service families, and the defence industry. Liberal Democrats would put in place a long-term defence industrial strategy to protect sovereign capability, provide certainty to industry, and ensure investment in R&D, training and regional jobs.
To recap, in his defence spending statement in February, the Prime Minister confirmed that intelligence spending would be added to the core defence budget, taking it to 2.6%. By our reckoning, that intelligence spend is the equivalent of almost 0.2% of GDP. Subtracting that from 2.6% gives a figure of just over 2.4%. The smoke and mirrors do not end there. That 2.4% will have to cover the cost of Chagos, which is at least £250 million next year, rising to a total of £30 billion. That 2.4% will also have to include spending on election interference, and other non-official development assistance FCDO expenditure that the spending review confirmed would now be added to the defence budget. The significance of that is that if 2.6% is actually in the region of 2.4%, it will mean that the increase in defence spending to 2027 is not the biggest since the cold war, because it will be less than the increase when Boris Johnson was Prime Minister in 2019.
Here is the upshot of the so-called 5% on national security that Labour has announced at NATO: no new money in the 1.5% for security and resilience, just reclassification of existing spending; no plan to get to 3.5% on the core defence budget by 2035; and no plan to get to 3% on the core defence budget in the next Parliament. The detail of the spending review confirmed that when spending hits the supposed figure of 2.6% in 2027, it does not increase towards 3% but stays flat. Worse than that, as I have explained, defence spending does not get to 2.6% on defence at all, but to something like 2.4% at best. It is smoke and mirrors at every turn.
If there is one thing worse than the lack of substance in Labour’s defence spending spin, it is the lack of urgency. Its promises are all about 2035, a decade away, but the threats that we face are real and imminent. As the Chair of the Public Accounts Committee said in his excellent speech, last July the head of the Army, General Walker, said that we must be ready for a war not in a decade or even five years, but within three years. The SDR promised a bigger Army in reserve, but only in the 2030s. Its big headline promise on attack submarines will be delivered into the 2040s.
Warfare is changing fast, but Labour is moving far too slowly. The SDR was promised for the spring, but published in the summer. The defence industrial strategy was also promised for the spring, but the Minister recently confirmed to me in a written answer that it is months away. The Government must move much faster to boost the total lethality of our forces in the near term, not least by rapidly embracing the extraordinary opportunity to boost our overall mass and capability through autonomous systems and drones.
In my defence drone strategy, the aim was to provide high-quality drone and anti-drone tech for Ukraine—which we have done, and I am very proud of that—and then to learn from that, in parallel, to build a UK sovereign drone industrial base, but that has been completely stymied by the procurement freeze effectively in place since the election. Labour is prioritising penny-pinching over rapid rearmament. While Ukraine is producing thousands and thousands of drones every month, Labour ordered just three new military drones for the British armed forces in its first financial year in government.
What would we do differently? We would go to 3% on defence in this Parliament. We would scrap the Government’s crazy Chagos deal and use the money to rapidly rearm, starting with next year’s £250 million on Chagos. That cash could be spent not on tax cuts for the Mauritians, but on drones and anti-drone tech from British SMEs—on tech that is battle-proven in Ukraine and can be produced in months, and that can be ordered at a low cost but a sufficient scale to enable the Army to start training comprehensively in drone warfare by next year. That is the kind of urgency that we need to see against the threat we face.
If the country hears that the Government are going to spend 5% of GDP on defence, it will assume that it will be like in 1985, when we actually spent 5% of GDP on our military, not on smoke and mirrors. That gave us 337,000 regular personnel, over 600 combat aircraft and a full array of tactical nuclear weapons for land, sea and air. Perhaps there is a reason why our 5% then was so different from Labour’s 5% today: in 1985, our Prime Minister actually led the country.
Instead of surrendering sovereignty, Mrs Thatcher stood up to Galtieri and successfully defended the Falklands. She would never have been neutral when asked if she supported strikes by the US on the nuclear programme of a country like Iran. By standing shoulder to shoulder with Washington, she helped to bring down the Berlin wall and relight the torch of freedom in Europe. Far from returning to the days of 1985 and actually spending 5% of GDP on defence, we now have instead a massive con trick from Labour. Unfunded ambitions and smoke and mirrors will not deter our adversaries. In Armed Forces Week, those who bravely serve our nation deserve much better.
We have always met our NATO commitments. That goes for parties on both sides of the House; when the Conservatives were in government, they met our NATO commitments, and we have always met them and will continue to do so. The way that our spending commitments will be funded in the next Parliament will be set out during that Parliament, but we cannot set a path directly from this Parliament into the next one. NATO will be looking at that. [Interruption.]Well,I would say to the right hon. Member for Rayleigh and Wickford (Mr Francois)that we do not budget for that length of time in the future, and neither did his party when it was in office. It is not how we do budgeting in this Parliament and it is not how his Government budgeted either.
Some of the programmes we have inherited have troubled histories. That is one of the reasons why we are committed to defence reform. One of the problems with our procurement and acquisition system—this was mentioned, including by those who have perhaps experienced it in their professional life, whether in the forces or in the Department—is that it is not fit for purpose when it comes to doing things quickly and delivering what it says it will. The defence reform agenda is not about reorganising for the sake of it. That is not what we ought to be doing. Were the system in perfect order, we would not be reforming it. This reform is about ensuring that the national armaments director is accountable to Ministers and the services for delivering the equipment that the services need in a timely fashion, because that is not what happens now. Currently, each service goes off on frolics of their own. They have their equipment budgets and top-level budgets, and know what they want, and they never really talk to each other across services. As the hon. Gentleman said, a programme might get started because people think that they want the equipment, and it is a 10-year programme that is not funded right to the end, so money gets wasted. We have to do better.
One way we will do better is by having much clearer accountability. The NAD is a tremendously important figure in that. We will also make sure that we shorten our acquisition timescales. We cannot just have CADMID— concept, assessment, demonstration, manufacture, in service and disposal—for everything, with pre-contract phases and so on. We cannot do that any longer. We are not in times when we can get away with taking 10 years to produce something that is not quite what we wanted in the first place. There has been too much of that, and that is why we are segmenting our acquisition budget. The NAD will be in charge of delivering the capabilities that all our services need in much shorter timescales.
As for drones and that kind of capability, we are trying to get to contract within three months. By standing up UK Defence Innovation with a ringfenced budget of £400 million this year, and 10% of our investment budget in future, we aim to ensure that there is the money to innovate fast and get lethality into the hands of our warfighters faster. That is essential. We need to shorten the time it takes to get there, even for nuclear submarines. Members will have seen the aspiration in the SDR to get the time to contract down from an average of six years for those kinds of things to two years. That is a challenging aim.
On spiral upgrades and the new radars for our existing capabilities, we need to make sure that we get the time to contract down to a year. We need a much faster pace of innovation, change and improvement. The NAD will be responsible for that. There will be direct lines of accountability, and direct budget lines for which he is accountable. We have to ensure culture change to empower those at a lower level, so that we do not slip back into the old way of doing things. That is a challenge, but we need to meet it, given the times we are in.