The armed forces’ capabilities allow the Ministry of Defence to meet a range of domestic and global commitments. Defence is reorganising and re-equipping to face future threats. However, as I have previously stated, as the threats change, we need to change with them. Any specific changes related to personnel numbers or military equipment capabilities will be determined once the update to the Defence Command Paper has concluded, which I expect to happen in June.
While I am conscious that my right hon. Friend has accepted the conclusions of last year’s 1922 defence committee report in drafting his Command Paper, I am also conscious of the fact that there is real concern, as we are about to hear, about the integrated review and, indeed, one-off increases. What does he think it will take for this House to sustainably increase defence spending, given geopolitical events?
I am grateful to my hon. Friend. First and foremost, we have been sustainably increasing our defence since 2020. The Prime Minister recognises the dangerous world we are in, and in the autumn statement both the Chancellor and the Prime Minister recognised the importance of increasing defence spending. The Prime Minister has obviously talked over the weekend about defence spending. There will be a Budget later in the week, and then I think there will be some further discussions to have.
Of course, the former head of the British Army, Lord Dannatt, said last month:
“The planned cuts in the strength of our army must be stopped...and fresh investment must pour into our artillery, air defence, communications and logistic capability.”
What is the Secretary of State, who has overseen some of these cuts, now going to do to reverse and build back the capacity Lord Dannatt and others are calling for?
If the hon. Member had been listening, he would know that, in our Defence Command Paper, we are investing in air defence, electronic warfare, signals intelligence and communications—all the things he has just reeled off—but maybe he did not bother to listen originally. [Interruption.] I think it is interesting that Labour Members are heckling. We have not heard about a single penny of their defence plans in the last few years. Even the Royal United Services Institute speech by the shadow Secretary of State himself could not put a finger on the money. First and foremost, we are investing in our defence, and we have had a record increase since 2020. That compares with the Labour Government record: in 1997, they inherited 2.7% of GDP, which continued to fall all the way through, and only at the very last minute, when they had a £36 billion black hole, did they try to rectify it.
I am conscious that there is a statement to follow, but may I just pause and say thank you to the Defence Secretary and his team for the tireless work they have done in trying to secure additional funding of £11 billion and an increase in defence spending of 2.5%? It was not to be, and our military will be affected by that, not least our land forces. However, I do welcome the AUKUS agreement, which will secure hundreds of highly skilled jobs up and down the country. Is any part of the £3 billion of additional funding for the nuclear enterprise part of the £10 billion reserve for Dreadnought, or is it ringfenced for the AUKUS procurement programme, and is any of the £5 billion coming through subject to VAT, which would of course mean that one fifth of it will go back to the Treasury?
My right hon. Friend makes an interesting point about the details of the announcement. Obviously, the details will come forward in the Budget. What I can say is that the £2 billion-plus is new money. It is not part of the reserve or anything else, and it is separate from the £2.3 billion for Ukraine. It also comes on top of the £560 million of extra money for weapons and restocking announced in the autumn statement. On the nuclear chapter, the £3 billion is a recognition of the need for increased defence capability in that space, but also of the need to invest now in infrastructure, which, if we do not start now, will not be fit for purpose when AUKUS starts towards the end of the decade.
As we understand from the press, and as the right hon. Member for Bournemouth East (Mr Ellwood) said, we anticipate an additional £5 billion for defence between now and 2025. The Ministry of Defence has said that the Secretary of State is delighted with the settlement, which represents a commitment to an upward trajectory. Given the impact of defence inflation and the full-scale invasion of Ukraine, what does he make of plans to reduce the size of the Army to 72,500 by 2025?
The reduction in the size of the Army was coupled with record investment of £24 billion in the armed forces at the same time. It was also a recognition that the most important thing is to ensure that we give the men and women of our armed forces, whichever service they are in, the correct equipment at the correct time, and create a 360° armed forces. There is no point in playing a numbers game if we do not equip, house, care for and deploy people properly. The hon. Gentleman might want to play a numbers game, but I do not want to turn our soldiers into cannon fodder.
James Gray (North Wiltshire) (Con)
The whole House will be delighted to see you back in your seat, Madam Deputy Speaker. I pay tribute to the Secretary of State and the entire team for the battle they have fought with the Treasury over the past few weeks, but the £5 billion is disappointing, particularly if £3 billion goes to AUKUS, and £1.9 billion goes to filling up our warehouses. It actually means a cut in defence spending, rather than an increase. Nevertheless, I was encouraged by what the Secretary of State said a moment ago about the Budget on Wednesday, and various other remarks that seem to indicate that there may be more money to come. Am I being over-optimistic?
As my hon. Friend will know, all Departments are within their current comprehensive spending agreement, and the next comprehensive spending review is due in 18 months to two years’ time. Although all Departments, including those of Defence, Transport, and Health and Social Care suffer from pressures with higher inflation, it is right to ensure that we live within the envelope and, where possible, seek relief for a range of challenges. That is what I have been seeking for the next two years with the Treasury. I have also said consistently that the most important thing is the headmark for the long-term direction of defence spending, so that it is no longer declining, as it has done for the past three decades, but is on an upward trajectory. Since 2020, it has been on that upward trajectory. This grant of extra money continues that momentum, which is incredibly important, and I hope that the headmark will soon be announced in detail.
In November, the Defence Secretary told the Defence Committee that
“yes, the inflationary pressure on my budget for the next two years is about £8 billion”.
From the media briefing at the weekend, we know he has a welcome £5 billion earmarked for stockpiles and the UK’s nuclear programme, but the armed forces will see that funding as a defeat for the MOD in Government. There is no new money for pressures on the core defence budget or to help deal with capability gaps, or even to deal with that inflation. The National Audit Office has already said that the MOD cannot afford the capabilities needed in the 2021 integrated review, so how will the Secretary of State ensure that precisely the same does not happen again with today’s 2023 integrated review?
What I am going to do, which the right hon. Gentleman’s Government failed to do, is ensure that the Defence Command Paper reflects the budget I have. I have always been consistent that the Government’s ambition should match their stomach, and match the money. If we do not get that in tandem, we will discover that black holes grow over the years. The right hon. Gentleman’s Government was part of that last time, as were previous Conservative Governments. I have come to this House consistently to take responsibility for what our Governments have done in the past, and I would be interested to see whether he will.
In 2010 when Labour left government, we were spending 2.5% of GDP on defence—a level that has been nowhere near matched in any of the 13 years since. The Secretary of State is now the Conservative party’s longest serving Defence Secretary, which means he has a track record of his own. He has cut the Army to 76,000 with more cuts to come. The Ajax armoured vehicle is six years late, with still no in-service date. He has cut and delayed new Wedgetail and Sentry planes, and he has growing doubts from allies about Britain meeting its NATO obligations in full. Last month he admitted to the House that forces have been hollowed out and underfunded with Conservative Governments. Will he accept that his extra defence funding today can only mean more of the same?
If people came to this House with real, genuine honesty about the track record of the Governments they were part of, the armed forces might be in a better position. What we should strive for is for the men and women of the armed forces to know that their political leaders are prepared to be clear about past mistakes and to talk about the future with some honesty. The National Audit Office report gave a view on the Labour party’s governance of defence. I have it here, because Labour Members often forget it. It said that the Department’s poor financial management had led to a severe funding shortfall of up to £36 billion in defence spending over the next 10 years.