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House of Commons Hansard
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Departmental Funding
11 June 2018
Volume 642
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11. What recent discussions he has had with the Chancellor of the Exchequer on future funding for his Department. [905752]

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I have regular discussions with the Chancellor. The modernising defence programme will ensure that our armed forces have the right capabilities to address evolving threats. The Government are committed to spending at least 2% of GDP on defence, and the defence budget will rise by at least 0.5% above inflation every year of this Parliament, taking it to almost £40 billion by 2021.

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I thank the Secretary of State for that helpful reply. Would he like to take this opportunity to endorse the suggestion by his immediate predecessor that we should aim to spend 2.5% of GDP on defence by the end of this Parliament? Does he agree that that would be a useful staging post on the road to the 3% that we really need? Finally, would the forthcoming NATO summit not be an excellent opportunity to announce any such advance?

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I thought the right hon. Gentleman was going to give us his usual mantra, “We need three to keep us free,” but it was incorporated in the gravamen of his question.

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I think my right hon. Friend is saving that for the next Defence questions.

We need to be looking at the threats that are starting to evolve right across the world, including in Europe. Those threats are increasing dramatically, and we have to ensure that we have the right capabilities to meet them. That is why we have the modernising defence programme to look in detail at how those threats are evolving, and why we are leading that analysis in the Ministry of Defence rather than any other part of Government. We want to come up with the solutions and answers to ensure that Britain and our allies are defended to the very best of our capability.

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The Secretary of State knows that it is about not simply the amount of money but when it is made available for key programmes. It was great to welcome him up to Barrow shipyard a couple of weeks back, but does he accept that unless he can persuade the Treasury to release more money for the Dreadnought programme in the crucial early years, we risk the programme being more expensive and potentially late, endangering the continuous at-sea deterrent?

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The hon. Gentleman makes a valuable point. It is essential that we have the right resources at the right time to deliver that critical programme. That is why I was so pleased that we were able to secure an extra £800 million in this financial year to ensure that our nuclear deterrent is delivered on time and in budget.

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As my right hon. Friend will agree, we must adequately fund our armed forces to support those who selflessly put their lives on the line for our country—a concept that the Scottish Government do not seem to understand. Can he update the House on the measures that the UK Government are taking to mitigate Nicola Sturgeon’s Government’s tax hike for those brave service personnel?

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It is truly shocking to think that the Scottish National party decided to put that extra taxation burden on our service personnel in Scotland, especially when we asked them not to do so. That is why we are proceeding with a review rapidly, and we hope to report our findings to the House in the not-too- distant future.

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I am tempted to respond to that, but can the Secretary of State not convince the Treasury that building the Royal Navy support ships in-house at the likes of Rosyth would see a tax revenue gain for the Treasury and help us to retain skills, talent and investment in our shipyards? Is that not what the shipbuilding strategy is all about, or is the Treasury incapable of playing a team game?

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I thought for a moment that we were going to have an apology to the 70% of service personnel who are having to pay extra taxes as a result of the Nat tax that the hon. Gentleman’s party has introduced.

This Government are absolutely committed to shipbuilding. That is why we will be building eight Type 26 frigates in Glasgow and five offshore patrol vessels in Govan. The hon. Gentleman should welcome that.

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A recent profile by BuzzFeed revealed that some colleagues have likened the Defence Secretary to Francis Urquhart, although they suggest that the fictional character may be a bit more sophisticated—they might think that; I couldn’t possibly comment. With Ministers arguing in recent weeks that defence funding should rise north of 2.5%, can the Secretary of State tell us what sophisticated tactics he will be using to get the Chancellor to agree?

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As a Yorkshireman born and bred, I know that we tend to be quite blunt and plain-speaking, so sophistication is not usually something that is attached to us.

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Speak for yourself!

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They are different in West Yorkshire.

What we are doing is taking the time to look at the threat and the challenges this nation faces. Over the past 10 years, we have seen the threat picture change so much. This is not just something we have noticed; from sitting down with our NATO allies, I know we are all seeing exactly the same. The world is getting increasingly dangerous, with state actors playing an ever greater role. It is right that we look at that closely, and make sure our armed forces have the equipment and resources they need to defend this nation against those threats.

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In January, the Under-Secretary of State for Defence, the right hon. Member for Bournemouth East (Mr Ellwood), who is the Minister with responsibility for defence people, said that the cap on armed forces pay

“has been lifted…and we look forward to the recommendations that will be made in March.”—[Official Report, 29 January 2018; Vol. 635, c. 597.]

Given that it is now June and that this Government continue to be all words and no deeds, will the Secretary of State tell us when service personnel are going to receive the long overdue real-terms pay rise they deserve?

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It was the Treasury that announced the changes on public sector pay, but we are working very closely with the Armed Forces Pay Review Body to get to the point where we can make such an announcement as swiftly as possible. I and my right hon. Friend the Under-Secretary of State for Defence will be working closely together to ensure that that is done as swiftly as possible.