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Defence Spending

Volume 598: debated on Monday 13 July 2015

19. How existing and anticipated threats to UK interests will be taken into account (a) as part of the strategic defence and security review and (b) in future allocations of defence expenditure. (900925)

The SDSR will consider the broad range of threats we face, both now and in the future. The national security strategy is being reviewed and will draw on the latest version of the national security risk assessment. As my right hon. Friend the Chancellor made clear last week, this Government are committed to increasing the defence budget by 0.5% in real terms and meeting the NATO pledge to spend 2% of GDP on defence each and every year of this decade.

I thank the Minister for his answer. When considering the SDSR, we are all aware of the highly skilled workforce on the Clyde who are waiting to build Type 26 frigates. Can he explain what was meant by the article in The Sunday Times which stated that the Government would be “bringing realism” to this programme? What does that mean for the future of this vital project? Can he guarantee that there will be no further delays or doubts cast upon it?

My right hon. Friend the Secretary of State has already answered that question in response to a previous one. The workforce on the Clyde are currently manufacturing three offshore patrol vessels commissioned by the previous coalition Government. We want to make sure that before we enter the full manufacturing contracts, the contracts’ structures are robust and we can hold the contractors to account, unlike what happened with the aircraft carrier contracts, which blew up to more than double their original cost.

I am a great fan of my hon. Friend and my right hon. Friend the Secretary of State, but we need a little more clarity on the question of defence spending. Paragraph 2.22 of the Treasury Red Book states:

“The Ministry of Defence budget will rise at 0.5% per year in real terms to 2020-21.”

Given that the economy is growing at about 3%, can my hon. Friend tell me how we are going to meet the 2% commitment when there is to be only a 0.5% increase in the budget? Is it to be done by raiding other accounts?

I am very much aware of my hon. Friend’s success in securing a position in the private Members’ Bill ballot to introduce legislation on this very subject. I have the privilege of confirming to him and to the House that I will be answering those debates, so we will have plenty of opportunities to discuss this issue. The bald fact is that we are meeting the 2% commitment this year, and as I have just said, we will meet it each and every year of this Parliament.