4. What estimate he has made of the likely change in the level of defence spending over the course of this Parliament. 
As from this month, the Ministry of Defence’s budget has risen to more than £35 billion—that is an increase of £800 million on the year just ended. This is the first real-terms increase in six years, reflecting the priority set out by this Government in the 2015 spending review to increase defence spending by 0.5% above inflation every year to 2020-21. This Government have clearly committed this country to meeting the NATO guideline of spending 2% of GDP on defence each and every year of this decade.
I welcome this increased budget. If we were to adopt the position advocated by some and not spend 2%, what would the impact be on the morale of our troops, their equipment and our security?
My hon. Friend is right to identify that the threats we face are growing in scale, complexity and concurrency, and a failure to meet this commitment would have a significant adverse impact on our ability to deliver the capability we need to face those threats and would send a very wrong message to our adversaries. Our commitment to spending 2% of GDP on defence enables us to deliver one of the most capable armed forces in the world; to spend more than £178 billion on equipment and equipment support over the next decade; and to fund an increase in the number of regular personnel for both the Royal Navy and the Royal Air Force, and of reservists for the British Army.
19. But the Minister cannot pull the wool over our eyes on this one, because we all know that defence spending was set to fall below 2% of GDP, but for the Government including things that had never been included in the NATO analysis before, such as war pensions and the pension contributions of MOD civilian staff. Will he now come clean? Will he have to resort to these sorts of accounting gimmicks to be able to assure NATO that in future we will maintain 2% spending? 
The hon. Gentleman, in characteristic style, is looking for smoke where there is no fire. We use the NATO definition to make the calculation of our proportion of GDP spent on defence, and it assesses the figure and then publishes it. We have done that in the past under previous Administrations and we will do it again under this one.
18. The Government’s defence review set out a £178 billion programme of investment in equipment for our armed forces over the next decade. Will the Minister ignore calls from the other parties to cut defence spending, which would mean smaller, weaker armed forces and the loss of highly skilled jobs in the defence sector? 
I thank my hon. Friend for giving me the chance to rehearse again our commitment to increased spending on defence and security for each and every year of this Parliament—that will be a real-terms increase. We have published our 10-year forward equipment plan, which shows the contribution that defence will be making to the prosperity of the nation—that is another objective we have taken on in the defence review for the first time. That will benefit both the security of our nation and the economy as a whole.
Despite the claims by the Minister’s Department, the reality is that, between 2010 and 2015, the Royal Navy has had a 33% decline in carriers and amphibious ships, a 17% decline in submarines and a 17% decline in destroyers and frigates. We are a maritime nation, and yet our Navy is declining. Is it not time that we placed greater investment in our maritime capabilities?
The hon. Lady is very experienced in these matters, and she will know that, in 2010, the then coalition Government inherited a dire financial situation across the public sector, and especially in defence, and some very difficult decisions had to be taken to reduce certain front-line elements, including our aircraft carriers. She is also fully aware that we are in the midst of the largest shipbuilding programme that this country has ever known. Early next year, we expect to see the first of the Queen Elizabeth-class aircraft carriers moved out of Rosyth to take up their position with the Royal Navy.
I proposed a private Member’s Bill last year requiring the Government to enshrine in law that we spend at least 2% of GDP on defence. May I welcome today’s announcement and hope that the hon. Member for Denton and Reddish (Andrew Gwynne) is wrong and that this really does represent new money? May I also take this opportunity to congratulate my hon. Friend on the important work that he has done, under the lead of the Prime Minister, in promoting defence exports, and to welcome the 24 Typhoons that have been sold to Kuwait and hope that that will contribute to the Ministry of Defence’s budget?
I thank my hon. Friend who, in a previous role, had responsibility for promoting defence exports. I also wish to say that I have even better news for him: the announcement last week of the sale of Typhoons to Kuwait was for not for 24 aircraft, but for 28.
What defence spending can the Minister guarantee for the steel industry given that the procurement rules allow for community benefit?
This Government have undertaken a new set of procurement guidelines for steel, which we have implemented through the Ministry of Defence through a combination of briefings to the Defence Suppliers Forum undertaken by the Secretary of State. I have also written to the chief executives of the 15 largest contractors. We are cascading that through the supply chain to ensure that, for future defence procurement, there is every opportunity for UK steel manufacturers to bid for tenders.
Government Members appear to be insinuating that the Labour party is advocating a reduction in defence spending, which is entirely untrue. It is perhaps unfortunate that the hon. Member for Tamworth (Christopher Pincher) talked about the impact that defence cuts have on the morale of our armed forces, because I have here a letter from the Secretary of State confirming that the MOD agreed to make £500 million of in-year savings after the Budget this year. The Government, of which this Minister is a part, has overseen a 17% cut in those Royal Navy warships and now, for the first time since 1982, have left the Falklands without a Royal Navy frigate protecting it. Can he clarify the record that we have a Government who are cutting defence spending—massively in recent years—and leaving the nation less protected as a result of it?
The hon. Gentleman really needs to read those letters more carefully. The reduction to which he referred related to the in-year spending of the Department, which ended at the beginning of this month. The defence budget for the current year, and for each future year, is going up, and the question that he and his colleagues need to answer is this: why will his party not commit, as our party has, to the 2% NATO commitment?