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House of Commons Hansard
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23 October 2017
Volume 630
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2. What recent discussions he has had with the Chancellor of the Exchequer on the adequacy of defence funding. [901301]

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I have regular discussions with the Chancellor. The Government are committed to spending at least 2% of GDP on defence and to growing the defence budget by at least 0.5% above inflation every year of this Parliament. The defence budget will therefore rise from £36 billion this year to almost £40 billion by 2020-21.

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Does the Secretary of State agree that the inadequacy of current funding and the uncertainty around long-term investments that that generates has had an impact on the security of jobs at BAE Systems, including in my constituency?

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If Opposition Members were really concerned about jobs at BAE Systems, they would get behind our export campaigns for Typhoon and Hawk aircraft, rather than undermining them by criticising potential customers. When I saw the chairman of BAE Systems last week, I reassured him that we wanted to continue to work with the company. I have emphasised the importance of keeping production lines open, should new orders for Typhoons and Hawks materialise, and of staying on track in developing RAF Marham for the arrival of the F-35.

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Does the Secretary of State recall that several years after we took the peace dividend, in the mid-1990s, we were still spending 3% of GDP on defence? Will he assure us that no inadequacy in the defence budget will lead to the loss of HMS Albion and HMS Bulwark, which are scheduled to leave service in 2033 and 2034, as the defence procurement Minister, my hon. Friend the Member for West Worcestershire (Harriett Baldwin), wrote to the Defence Committee to say only in January?

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On the latter point, I have referred to the purpose of the capabilities review, which is simply to make sure that the equipment programme that we set out in 2015 is on track and is spending our money in the best possible way to deal with the threats, which have intensified since then. On the first point, about finance, the defence budget was £34 billion when I became Defence Secretary. It is £36 billion today and it will reach £40 billion by 2020.

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We have heard that a Tory rebellion is growing over next month’s Budget, with half the Cabinet determined to sack the Chancellor because they are convinced that they can do a better job themselves. There is even speculation that the loyal Defence Secretary might be about to launch his own offensive on No. 11.

On a more serious matter, most of the Tory manifesto has already bitten the dust, so I was pleased that the Secretary of State seemed to be very confident about the commitment to a 0.5% year-on-year increase in defence spending. Will he give us a categorical assurance that there will be no fiddling of the figures, as we have seen with the NATO commitment on spending 2% of GDP?

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I am not sure whether the hon. Lady’s first point was a reference to speculation or scaremongering, but it is good to hear from her after she was gagged at the Labour party conference and not given any kind of speaking slot.

I can reassure the hon. Lady that our manifesto commitment to increasing the defence budget by at least 0.5% ahead of inflation is an absolute commitment and that we will stand by it. As for what is classified as 2% spending for the purposes of the NATO return, that is entirely a matter for NATO to decide.

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The reality is that the Government’s chaotic mismanagement has led to gaping holes in the MOD’s budget. As we have heard, there is real concern about cuts to our amphibious capabilities. Will the Secretary of State say categorically that there will be absolutely no cuts to the Royal Marines?

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The Royal Marines are part of the Royal Navy. With the latest Astute submarine, Audacious, launching back in the spring, the steel cut in July on HMS Glasgow, the first of our new frigates, the sailing of HMS Queen Elizabeth, and the naming of HMS Prince of Wales, HMS Forth and HMS Medway, nobody should be in any doubt that this year has seen the Royal Navy growing in power and numbers.

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We hear discussion of defence budgets, but would it not be worth our also focusing on what the armed forces achieve for the United Kingdom? Through their soft influence, ships visits and training establishments, are they not fundamentally part of our foreign policy and integrated defence?

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Absolutely, and smart and soft power are as important to us as hard power, which is why it is the Government’s ambition to continue to grow the defence budget, and the power and impact of our forces.

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I note that the hon. Member for Tonbridge and Malling (Tom Tugendhat) appears to be powered by wires. If he is subject to some sort of exterior propulsion, he may be setting a precedent for Chairs of Select Committees. We are very grateful to the hon. Gentleman, I feel sure—his attire will be closely followed in the future.