NATO Defence Spending Target

3. What discussions he has had with the Chancellor of the Exchequer on meeting the NATO target of spending 5% of GDP on defence.

At the Hague summit in June, all 32 NATO nations agreed to step up and increase spending on national security to 5% by 2035. I am proud that this Labour Government played a leading part in the discussions that led to that historic agreement.

Tomorrow we will vote on a Bill that shamefully gives up the sovereignty of our military base in Diego Garcia. Given the commitment to spend more on defence, will the Secretary of State confirm if the money spent on Chagos will be included in our declared NATO spend?

The investment in Diego Garcia is a great investment in the defence and intelligence partnership with the United States. Together, we do things from Diego Garcia that cannot be done elsewhere; we do things together that we do not do with other nations. The deal is worth less than 0.2% of the annual defence budget. How is it that the Conservatives have got themselves on the wrong side of this argument about national security, when we stand alongside the US as our closest allies?

Britain’s commitment to the 5% NATO target clearly sends a strong signal of our resolve, but that pledge must command public confidence that the money will be spent wisely. Can the Secretary of State provide more detail on how he is working with the Treasury, the Cabinet Office and others to ensure that every additional pound of public investment in defence delivers value for money for the taxpayer?

My hon. Friend is right. This is about not just how much the Government spend, but how well they spend. Mr Speaker, you will remember that under the previous Government, the Public Accounts Committee branded our defence procurement system as “broken”. We are reforming procurement, and that will be part of the statement this afternoon on the defence industrial strategy by my hon. Friend the Member for Plymouth Sutton and Devonport (Luke Pollard). At the heart of this, we made a commitment to the British people at the last election that we would raise defence spending to 2.5% of GDP, and we are doing that three years early. This is a Government who are delivering for defence and for Britain.

The Defence Secretary says that the Chagos giveaway will amount to no more than 0.2% of our defence budget. Does that not suggest the cost of the Chagos giveaway will in fact come out of the defence budget?

On the contrary, both the Foreign Secretary and I have been consistent that, taken across the range, the cost of the settlement with Mauritius for Diego Garcia is split between the Ministry of Defence and the Foreign, Commonwealth and Development Office. For defence, our commitment is less than 0.2% of the defence budget. That is a good investment for this country, and it gives us a sovereign right to operate that base with the Americans for the next 99 years.

I welcome the leadership displayed by the Prime Minister and Defence Secretary and our commitment to the historic 5% pledge. What steps will NATO take to further strengthen our response to growing Russian aggression?

The response of NATO has produced results exactly to the contrary of those President Putin would have wanted when he invaded Ukraine three-and-a-half years ago. NATO is now bigger; it is 32 nations strong. The commitment that all 32 nations made in the June summit to increase national security spending to 5% by 2035 is a strong deterrent message to Putin, Russia and other adversaries, and it will make NATO bigger and stronger in order to deter in the years ahead.

I call the shadow Secretary of State.

I congratulate the hon. and gallant Member for North East Derbyshire (Louise Sandher-Jones) and the hon. Member for Plymouth Sutton and Devonport (Luke Pollard) on their promotions. I also send my best wishes to the right hon. Member for Liverpool Garston (Maria Eagle); it was always a pleasure to work with her.

On defence spending, can the Secretary of State confirm what percentage of GDP will be used to set the cost envelope for the defence investment plan?

When we settle our defence investment plan and produce our annual report and accounts, the data that the hon. Gentleman seeks will be set out clearly and in the customary way to this House.

Interestingly, the answer is not 3.5%, it is not 3%, and it is not even 2.6%—those are the figures we declare to NATO; they are not from the Ministry of Defence budget. As the then armed forces Minister, the hon. Member for Plymouth Sutton and Devonport, confirmed to me last week in a written answer, the amount we will spend on the defence investment plan comes entirely from the MOD’s departmental budget. Therefore, the actual figure for funding our future defence equipment is just 2.2% by 2027, with no funded plans to go any higher. Given the threats we face, is 2.2% enough?

It should come as no surprise to anyone that the defence investment plan will be funded from the defence budget. That is exactly what will happen. It will be funded and supported by the record increase in defence spending since the end of the cold war—by the £5 billion extra in this year’s Budget—with an aim to spend 3% of GDP on defence during the next Parliament. These are commitments that the previous Conservative Government had 14 years to make, but never made. This is a Government who are delivering for defence and delivering for Britain.