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Defence Review

Volume 788: debated on Thursday 18 January 2018

Question for Short Debate

Asked by

To ask Her Majesty's Government whether they intend to conduct a full defence review, in the light of the capability of the Armed Forces to meet global defence needs.

My Lords, I respectfully remind your Lordships that the time in which to speak is limited to two minutes. I am sorry about that but if noble Lords could honour it, I would be very grateful.

May I be allowed to ask whether that includes breathing time?

My Lords, I am most grateful to have the opportunity to address this crucial subject in your Lordships’ House. In Her Majesty’s Loyal Address on 27 May 2015, the Queen used the word “re-engage”. I tried to find out who put that word in—No. 10, the Foreign Office or the palace? I never nailed it down.

That word says it all. We have been disengaging for years from many countries—and, crucially, from those of the Commonwealth. They are fast coming to the conclusion that we are becoming part of yesterday. We all know that to recover respect and standing is a hard hill to climb.

Early last year I, and others, called for a fully up-to-date SDSR, as it had become more than clear that not only had the world become a vastly more dangerous place but our withdrawal from the European Union—not Europe—added a major global dimension to our needs and responsibilities. Circumstances in 2018 are light years away from those in 2014-15.

As many of us who were involved at the time knew, the 2010 SDSR was, frankly, an unmitigated disaster from which the Ministry of Defence has still not fully recovered. The 2015 review was carried out in a much more professional way, the result of which substantially improved the hardware and kit for our armed services, but the financial resources needed were heavily under- estimated. Ministers are still instructed to keep to the government line—namely, the now famous “2% NATO”, and so on and so on—yet they must be more than aware of the lack of resources leading to the dangerous hollowing out that is taking place daily. This is known not just by our allies—in particular, the United States—but by our potential enemies.

What is most worrying is that our people and their families and, of course, all those involved in our defence industries are only too aware of our known weaknesses, and so increasingly are the public at large via the media in their many forms. Is it therefore a surprise that the quality of those we are trying to recruit is faltering? And worse, some of our best are leaving. I am sure that other noble and noble and gallant Lords will spell out those needs during this short debate.

The men and women who serve and wish to serve in our armed services are by far the key construct, and it is vital that they and their families are fully confident that the necessary resources will unquestionably be available so that not only can they fight to the best of their abilities but they are provided with the finest protection. Of course we accept that we are not trying to emulate our world role as it was in the Churchill days of the Second World War, but in the years to come we must have a fighting force of the necessary strength which will in itself be a deterrent—the finest equipped and the finest trained, led by forward-thinking, innovative leadership that can respond immediately to possible expected threats and, most of all, the unexpected. Our armed services have always played a key role in responding to catastrophic events that take place from time to time throughout the world.

As recently endorsed by our Secretary of State for Defence, the right honourable Gavin Williamson, our Armed Forces should be the “best in the world”. Much needs to be changed if this goal is to be achieved, but many act as though we have all the time in the world—we need it like yesterday.

On Thursday of last week, 11 January, I went to the Commons to observe and listen to the Back-Bench defence debate led by Vernon Coaker, MP, the distinguished former shadow Secretary of State, who made an excellent opening speech and closed with passion. If you have not read it, it is a must. What is more, it is better to watch it live, as Hansard does not do justice to the experience of seeing the body language, the passion, the eloquence and the deep knowledge of the subject among our Members of Parliament. James Gray MP, chairman of the APPG for the Armed Forces, pointed out that in the past, there were five government-called debates on defence every year, and the House was packed.

What was also splendid was the non-partisan participation from all sides of the House, covering the whole of the United Kingdom: Labour, Conservative, SNP, and other MPs from Scotland, Wales and Northern Ireland et cetera. It was also clear that unless the right levels of resources were forthcoming, there was and would be grave disquiet behind the Government Benches. I am sorry to have to have to inform my noble friend the Minister that I would totally share that sentiment.

The debate lasted nearly five hours, and I only wish the public and the media were aware that they have such calibre of MPs trying to do their duty on behalf of the nation for the defence of the realm. They should be truly grateful for their efforts. I am sure my noble friend the Minister would strongly agree that this House, with all its knowledge, experience and wisdom, has the same unquestionable sense of duty.

It is has been known for at least three years that much greater resource was needed to support both present and future defence needs, taking account of course of the increasing roles of cyber, intelligence, technology et cetera. It was hoped much would result from the security review which was started by our National Security Adviser, Sir Mark Sedwill, last June. It consisted of 12 strands, but with only one strand covering the Ministry of Defence.

However, that review has to be fiscally neutral. It does not make sense. Surely, the outcome should be fully costed in order to decide the total resources needed to decide the way forward. I was a founder member of the Joint Committee on the National Security Strategy some 12 years ago, and we all agreed then that the National Security Council should be a key organisation for this country, but that it did not have the right structure to achieve this objective. I am afraid the jury is still out. It should be a strategic body and much more widely represented, with the direct involvement of the Chiefs of Staff with their own strategic input.

Dr Julian Lewis, the chairman of the Defence Select Committee, stated in the Commons debate that in times past, in particular during World War II and later, their strategic views were given direct to both Prime Ministers, Winston Churchill and then Clement Atlee. Sir Mark, as National Security Adviser, must be allowed to be more independent—to have more independence and therefore influence—more like his counterparts in the United States.

We are dangerously running out of time. I personally find most frustrating the length of time it takes for decisions to be made and implemented. If we were on a war footing, much of this bureaucratic baggage would immediately fall away. Many of us in both our Houses wish to see a properly funded foreign service delivering a clear long-term foreign policy, itemising both risks and opportunities. A proper defence review should clearly identify value for money, not just cost, and demonstrate clearly the financial resources needed for both our short-term and long-term needs in cash-flow terms.

As we speak, some £2 billion is most urgently needed just to complete the present programme. As Dr Lewis and many others in both Houses have stressed, and continue to stress, we should unquestionably allocate at least 3% of our GDP—which is still a low percentage in comparison with the past. Many billions would flow back into our own economy through sovereign purchases, and it will unquestionably be of economic benefit. This level of funding would send a powerful signal to our NATO allies and certainly help our negotiations with the European Union.

The First Lord of the Treasury is the Prime Minister, so surely the Treasury does not have the final word. Following her powerful speech at Lancaster House, I would like to think that the very strong views expressed in both Houses will convince the Prime Minister that she has the quality of support which would enable her words to become a reality.

On a different subject, President Trump—I reiterate President Trump, not Trump—released the US national security strategy just before the Christmas break. As usual, television, radio and other media immediately panned it in a most superficial way. Later that afternoon, I discussed the release and the document itself with a very senior officer in the Department of Defense and we both agreed that it was not only a most interesting document but the declaration of a confident country— I stress the word “confident”. It is a country that is further strengthening its already extraordinary economy and which, not surprisingly, puts “America first” but, unlike President Obama who was becoming increasingly isolationist, intends to return to its former world role of defending and protecting western values throughout the world. It is totally understandable that the President considers it only fair that the rest of us share the bill.

Our relationship with the United States through history—our key military ally, our expectation to be major trading partners and our shared culture—is unique. Therefore, I find it extraordinary that the Government, despite the degree of anti-feeling, were not more robust months ago to warmly invite the President of the United States of America to visit the United Kingdom. Historically, this country was famous for its realpolitik; both Germany and France, who are not known lovers of the United States, are more than prepared to use it to the full. Personal views should play no part whatever.

Today, sadly, this country could not release a national security strategy with the same confidence of that of the United States but, with powerful leadership and the support of parliamentarians, that day can come. We will have done our duty.

My Lords, I shall focus on the importance of continuing to develop soft power and the UK’s contribution to UN peacekeeping work. Our Armed Forces play an invaluable role in securing our national influence around the world and delivering on our security and economic goals. The expertise of the UK Armed Forces is, as my noble friend has said, both legendary and highly valued. I witnessed this when I was the Prime Minister’s special representative for the preventing sexual violence in conflict initiative and the Foreign Office Minister responsible for UN peacekeeping. I visited the British support team in Kenya, and was impressed by their teaching courses for police and security personnel from across the region. Last year alone, 9,000 military, police and civilians were trained in specialist areas, ranging from protection of civilians, through numerous types of tactical training to high-end weapons technical intelligence and counter-IED courses. It is essential that we enable that work to continue in future.

The UK’s contribution to UN peacekeeping was enhanced in 2015 when David Cameron announced that, in addition to our financial support, we would send personnel as a troop contributing country to South Sudan. There, I met our Engineer Regiment-led task force, stationed in the north of South Sudan, which provides engineering support, such as the construction of a jetty on the River Nile, a vital temporary field hospital in Bentiu and helicopter landing sites. I was therefore delighted when my noble friend the Minister announced last November that the UK is extending its deployment in South Sudan until April 2020. It is, indeed, a demonstration of our commitment to international peace and security. We need to be sure that any review of spending and of our forces demonstrates a commitment to do much more in future.

My Lords, we are deeply grateful to the noble Lord, Lord Sterling, for giving us the opportunity for this debate today, as well as for giving the House the opportunity to respond by showing the pent-up demand for a proper defence debate that lasts all day. I hope that the powers that be have taken note of that response. I am left with about one and half minutes to make three points.

The first point is that, like everybody else, and any responsible citizen of this country and Members on both sides of the House, I hope to heaven that the Government are not planning any more defence cuts after the terrible way in which our defence capability has been run down over the past seven or eight years. It would be utterly unjustifiable; the world has not in any sense become a less dangerous place, and there is no justification whatever for that.

My second point is that, on that positive assumption that the Government do not have those plans—it really would be horrific if they did—I hope that they will put an end to the uncertainty by making a clear statement that there will not be any further defence cuts. The moment that comes up in any conversation that anybody has with serving military personnel, officers or other ranks, there is a real worry on that subject. I am sure that many colleagues have had such conversations in the past few weeks and months. This is really affecting morale, and it must be affecting recruitment. This is a quite unnecessary cost to impose on our military, on top of everything else. I hope, therefore, that clarity can be established very quickly.

My third point is this: I gather one reason why the MoD has run into financial problems recently has been the devaluation of sterling, and the higher sterling price as a result of procurement from the United States and, to some extent, the European Union, of the A400M programme. I suppose that the F35 is the major issue here. I hope we can have a statement on this from the Minister to put our minds at rest, because one thing that is absolutely clear is that under no circumstances should the military be made to pay the price for that devaluation. In no sense whatever is it the military’s fault. This is a direct result of government policy to hold the referendum and, afterwards, to decide—quite gratuitously, in my view—to understand it as excluding us from the single market and the customs union. This is having a devastating effect on the economy, of course, but it is nothing to do with the military, and the military should not be made responsible for it or have to suffer for it. That would be utterly unjust and irrational.

My Lords, I have a few brief points. I have great respect for the noble Earl, Lord Howe, but I say this in the nicest way: if he chooses to remain in office, he has to bear some responsibility for the financial situation that is ongoing at the Ministry of Defence. It is clear from the exchanges earlier in the week that the review has been nobbled and is being dovetailed, as was said earlier, into the existing budget. I strongly support greater NATO-European co-operation, and welcome the Anglo-French announcements today. Sadly, such greater co-operation is not helped by the tragedy of Brexit. We live in an increasingly dangerous world: China and Russia are modernising their forces and increasing defence expenditure, and the underwater threat is a particular concern. In my view, the current ratio of 3:1 defence expenditure to overseas aid is unsustainable. I favour a reduction in overseas aid from 0.7% to 0.5%, which would provide at least £2 billion annually for the defence budget.

I want to finish with a brief question to the Minister. Will he inform us of the latest position on the propulsion systems for the Type 45 destroyers?

My Lords, the Treasury-mandated starting point for the 2010 defence review was a reduction in the MoD’s budget of between 10% and 20% to be achieved over the first three years. The measures necessary to achieve such savings so quickly proved unpalatable, even to a Government focused wholly on the elimination of the deficit over the span of one Parliament. But even the savings that were eventually made, of some 7.5%, inevitably left a strategically incoherent defence programme. The best that could be done was to reach a position in 2015 from which coherence could be rebuilt, provided that substantial real-terms increases were made in the defence budget in each of the succeeding years.

In the 2015 review, the MoD produced a plan to restore coherence, although more slowly than envisaged in 2010, but the plan was inadequately funded. It relied on wholly unrealistic assumptions about the savings that could be made through efficiency. When, unsurprisingly, these failed to materialise, the plan was in trouble, and the subsequent fall in the exchange rate only exacerbated the problem.

The Government now face a choice: they can provide more money and fund the plan properly or they must come up with a new plan. I, of course, urge them to adopt the former course, not least because this is the minimum action that is required. Let it be remembered that the 2015 plan was about achieving coherence, not about restoring our defence capabilities to where they should be in this challenging and dangerous world. That would require an annual expenditure of more like 3% of GDP. Alas, I do not expect the Government to go so far. However, I trust that the Minister will, in due course, be able to confirm that they will at least do this bare minimum. I, like many other Members of your Lordships’ House, would view anything less with the gravest concern.

My Lords, I confide in you. Priests—even bishops, perhaps particularly so—are inclined to repeat themselves. I imagine noble Lords might have noticed. I have heard it said that we have only one sermon in us and just dress the message up differently each Sunday. I will be repeating my message today, and I am grateful to the noble Lord, Lord Sterling, for the opportunity to do so. I am just as grateful to the noble Earl, Lord Howe, for listening to my repetition with the grace, care and attention that we all appreciate.

My message is that I applaud the Government’s ambition for defence, which is about British power for good in the world—but as things stand, I doubt that we have the capability, or the defence budget to deliver the capability, to meet that ambition. Things could be about to get worse, judging by what we read in the media. So, if we are to meet the Government’s ambition, we must also review our ability to do so.

My second point is that the present state of uncertainty is not helpful, and that is an understatement. The media is not the forum in which to conduct discussions on defence expenditure. We should have discussions in private, followed speedily by clarity in public. That would be fair to those who are affected, so they know where they stand. The current lack of clarity creates uncertainty, particularly among the servicemen and women we value so much.

My final point is also on morale. The noble Earl may have an inkling of the direction in which I am heading. I hope that he will be able to respond to my question on whether he can commit to a debate on the Floor of the House on the Armed Forces covenant—an opportunity to pat the Government on the back for all that has been done and to look forward to all that might be done. When it comes to defence, our greatest riches are the commitment, sacrifice and professionalism of our Armed Forces. We need to provide them with resources and end this ghastly uncertainty.

My Lords, like other Members of your Lordships’ House, I am most grateful to the noble Lord, Lord Sterling. Oh, have I jumped ahead? I am so sorry.

My Lords, I wish to raise a very specific point for the Minister, concerning the Royal Navy and maintaining its reach.

Her Majesty’s Ship “Queen Elizabeth”—a carrier—is most welcome, and shortly she will enter into full service, but she needs substantial support. For example, she needs submarines underneath her, destroyers to protect her, frigates and, obviously, supply ships and landing craft et cetera. My main concern about the veritable naval armada that is contained, or implied, by these two great, new carriers is the implication for the existing service provided by the Royal Navy, in terms of protection in the Gulf, South Atlantic and Pacific. How will we maintain the proper servicing for an aircraft carrier—indeed, we will have two, with one always at sea—and how can we maintain our worldwide reach, as I believe we should?

My Lords, first, I apologise to the noble Lord, Lord Freeman, for jumping the gun. I was so keen to put my stopwatch on and make sure that I did not do more than my two minutes that I will misuse a few of my seconds now in apologising. I thank the noble Lord, Lord Sterling, for making sure that your Lordships’ House keeps coming back to the question of defence and defence expenditure. As he said, in the other place last week there was an excellent debate on defence where all the contributors, from whichever part of the other place, made clear their commitments to the Armed Forces and defence expenditure.

For slight reasons of getting the list wrong—it is not just me today—I do not speak as the Liberal Democrats Front-Bench speaker at the end of the list. However, on behalf of the Liberal Democrats, I want to reconfirm that we are still committed to 0.7% of GDP going to development aid. My noble friend Lord Lee made very good points about defence expenditure, but he maybe is not putting forward the party line on development aid.

We are deeply concerned about expenditure. I seem to recall that in the aftermath of the referendum the Minister repeatedly told us that defence expenditure was essentially hedged and would rise in real terms, yet that is not the advice that we seem to be given now. What commitment can he give us that defence expenditure will be ring-fenced in real terms? The right reverend Prelate the Bishop of Portsmouth rightly mentioned morale in our Armed Forces. What is the Minister doing about the offer in terms of pay and pensions, and to what extent does he think morale is in the right place? Can more be done? In particular, can he reassure us that adequate training will be given, including extreme-weather training for the Royal Marines, and that the Royal Marines’ position in our Armed Forces remains absolutely secure?

My Lords, deterrence is not just having Trident invulnerable at sea; it needs national resolve, with conventional defence and hitting power, too. A tripwire alone will not sustain deterrence credibility.

If diplomacy fails to avert conflict, or there is a bolt from the blue, what next? First, indicate determination not to give in and fight back with conventional force. If not, face the starkest of choices: immediate surrender or press that nuclear button.

Since the 1990s, we have had complete air superiority over opposing forces. That was not so in the Falklands. The opponent could not be denied airspace. Our losses mounted: six fighting ships and landing craft sunk; others knocked out of action; more than 30 air assets gone; nearly 1,000 dead or wounded, all in a mere three weeks. Only victory brought salvation, a halt to these setbacks and escape from disaster. After the conflict, we had enough in strength to make up for what had been lost.

Not so today. Losses at those rates now could soon leave us conventionally defenceless. The forces are too weak in manpower, equipment and weapons to absorb such losses and still fight on. So stop gutting and hollowing out the services. Let us build up numbers. If not, the national deterrent will be derided as mere political tokenism—the country an emperor with threadbare clothes. The deterrent lacks full credibility without more conventional clout to underpin it. Reviewers, please take note.

The way in which the noble Lord, Lord Sterling, has put his Question together is fairly open-ended, which gives a lot of us a chance, so I have lost two pages of what I was going to say by now.

I picked up the Times newspaper last week and was rather delighted to read that our national shipbuilding strategy has gone to work. It has recognised the challenges faced by the MoD and the UK industry and set out an ambitious plan to improve the way in which the MoD goes about procuring warships and how industry responds to the MoD. Procuring Type 31e through a competitive process within UK shipyards and with a capped cost of £250 million per ship will not only ensure that the Royal Navy can afford to buy enough of the ships it needs to meet its global commitments but will deliver value for money for taxpayers and strengthen UK industry, including through exports. We can do that because, right now, no other shipbuilding can match the price tag for our frigates.

I was also very tickled to read in the article that it looked like the end of BAE’s monopoly after all that time. Here we have competition back again. So I am a little more optimistic about what is going on. I am rather keen on us all having these fights every now and again. If we keep doing it, we will eventually feel that we are where we need to be. The man that we had involved with this is Sir John Parker, the industrialist and veteran of shipbuilding. Such men and women will take us to our next fight.

My Lords, I declare my interests as set out in the register. The 2015 defence review set out our strategic priorities and a vision for how defence should contribute to our country’s global ambitions. That review was under-resourced to the tune of half a billion pounds and that, added to the current adverse pound/dollar exchange rate, defence equipment inflation versus headline inflation and the failure of some efficiencies measures, results in today’s serious underfunding of the defence budget. Thus cuts are under way now. Incidentally, I take issue with the Minister in saying in our November debate that I was “completely wrong” regarding cuts having to be found to compensate for efficiencies not properly delivered. I am not wrong on that.

In addition to today’s cuts, further drastic savings measures are being considered. The Minister will say that this is all speculation and that no decisions have been made, but I suggest that he cannot deny that some very serious capability measures are being costed. If they are taken, that will have a dramatic effect on our ability to meet our SDSR 2015 mission requirements, and the Armed Forces will certainly not be able to deliver properly on contributing to the Government’s aspirations to be a global player, aspirations frequently articulated by the Prime Minister, the Secretary of State for Defence and, indeed, the noble Earl himself.

We cannot continue gaffer-taping up our disintegrating defence. We must either fund properly the capabilities set out in SDSR 2015, or we should have a proper defence review to recalibrate our country’s requirement for defence. If that suggests that our defence capability should be largely as now, let us see it resourced properly. If there is not the will to do that, cut cloth and recognise that the Government’s global ambitions are a wish too far.

My Lords, the noble Earl’s Statement on Monday left me with more questions than answers. In response to my noble friend Lord Tunnicliffe he said that the SDSR 2015 did not sufficiently predict the intensification of the threats that Britain now faces. What specific steps will be taken to ensure this error is not repeated? What is covered by a security capability review that was not covered by SDSR 2015? He told us that the Government had to be realistic in how they configure the defence budget over the next few years. Does not that mean even more cuts? He said that the capability review was fiscally neutral, adding that that may mean enhancing resources for certain capabilities and reducing them for others. He said that spending more on defence was not currently the reality that the Government were working on in this review. So can we deduce from the Minister’s comments that his Secretary of State has given way in his battle for more money from the Treasury?

The noble Earl said that plans to support the national security strategy would be as effective and efficient as possible—and this from a Government that spent £16 million on refitting RFA “Diligence”, our only at-sea repair ship, in order to scrap it, then spent £65 million on refitting HMS “Ocean”, our only vessel capable of allowing marines to deploy using landing craft and helicopters, only to scrap that, too, then announced that a further £20 million would be spent on adapting one of the carriers to carry out the role that “Ocean” carried out. Certainly “efficient” and “effective” would not be the words that I would use—but then that comes from a Government who attempted to sell HMS “Ark Royal” on eBay.

Today our Prime Minister is meeting the French President, hoping to agree further defence co-operation. Will the Prime Minister explain to Monsieur Macron why, since 2010, this Government have overseen a 50% reduction in our military capability, a point made by my noble friend Lord West of Spithead? It would be a welcome start if Mrs May called a halt to Britain’s descent into becoming a second-rate military power, and that rather than a piecemeal stab at a national security capability review, the Government should have a top to bottom review of our defence and security needs based on our foreign policy objectives, then provide the resources we need.

My Lords, I congratulate my noble friend Lord Sterling of Plaistow on introducing this timely, yet too short debate. As General Sir Nick Carter acknowledged recently on the “Today” programme, the security threats faced by this country have never been greater during his 40-year career. We are one of only five countries, including Greece and Estonia, which observe the NATO guideline to spend at least 2% of GDP on defence. I am not sure that we do still meet the 2% guideline, because we used not to include the intelligence and security budget within defence spending. Over the last several years, we have progressively moved the intelligence budget into defence, making it hard to compare present spending with that of 10 years ago as a proportion of GDP. Perhaps my noble friend the Minister could inform the Committee what is the current level of defence spending as compared with that of 10 years ago, on the same basis as we used to measure it? I suspect that it is more like 1.7% than 2%. Of course, I understand that we now conform to the NATO rules for measuring spending—so perhaps the Minister alternatively could tell us what defence spending would have been 10 years ago, if we had already at that time started including the intelligence budget within defence.

My noble friend referred to Mr Vernon Coaker, who expressed concern that, if the current national security capability review is to be fiscally neutral, and if spending on cyber and intelligence capabilities is to be increased, then it follows that the Government must be considering cutting pure defence expenditure or the capabilities of the Armed Forces. That would be extremely dangerous in the current climate. Could I ask my noble friend the Minister if the Government are still firmly committed to increasing pure defence spending in absolute terms, and as a percentage of GDP?

There are several reasons why the United Kingdom still punches above its weight around the world. Our country’s much-envied soft power does not depend only on the excellent quality of our foreign service personnel, highly skilled and effective though they are. Our soft power is considerably augmented by our hard power, or at least the perception that we still possess the highest-quality Armed Forces in the world—by no means the largest, but the most effective and well trained, man for man, in the world. Perhaps nowadays I should say “person for person”, which leads me finally to ask my noble friend the Minister whether he shares my concern that the attempt to recruit more people from different backgrounds, religions and orientations, and also to pander more to the emotional well-being of personnel at the expense of the traditional emphasis on physical fitness, threatens to backfire and may be counterproductive? Does he not agree that this new, politically correct approach may put off those potential recruits from traditional backgrounds, and that the Armed Forces may lose more than they gain? Does he not think it very important to continue to exhort our soldiers, sailors and airmen—I cannot bring myself to say air persons—to be the best? That would optimise the recruitment of suitable personnel from both traditional and the more diverse new backgrounds.

My Lords, we must now determine our future contribution and place in the world, while balancing the protection of our national interests and achievement of our foreign policy goals. Developing conventional capability partnerships for comparative advantage, disregarding vanity projects and matching critical requirements to budgetary constraints are fundamental. I would hope to hear today of much-needed tightened departmental guidelines on contract awards, spending procedures and budgetary control, as well as enhanced in-house scrutiny and delivery capabilities.

Political masters have an unenviable challenge to fund and deliver the effective tools and processes for each of the four strategic needs: ground, sea, air, and cyber. The fourth, the new threat of cyber, represents the biggest challenge. Is the Minister satisfied the United Kingdom has the resources and capabilities to counter current and future cyber threats? In order to ensure maximum necessary capability in our cybersecurity arsenal, we must know the extent of future co-operation on software vulnerability with ENISA, the EU cyber- security agency. I understand that a proposal to set up a certification framework, with ENISA as the hub, is in the offing, so from that point we can calculate our needs and costs. Are the Government addressing this with ENISA, or is this subject to the ongoing Brexit negotiations?

Her Majesty’s Government might wish to consider hosting a state-level global conference to map out political, security and cyber dialogues and responsibilities and to co-ordinate necessary scrutiny and enforcement mechanisms.

My Lords, the Question put by the noble Lord, Lord Sterling, is: should we have a full SDSR? It seems to me that the response to that depends on the effectiveness of the present process, which we were told about on 15 January. The affirmation then was that the threat was as in 2015 or worse, and another was that there was no more money. Another affirmation was that there would be no more muddling or hollowing out—call it what you like—with training cuts, a reduction in spares, ships tied up and repairs deferred. Frankly, those three statements are incapable of delivery. There is at least a £2 billion per year gap and it is necessary to do something about that.

So there is muddling—we know that there is. That is why morale is falling—the morale figures from the last review were dreadful—and it is why we are failing to recruit and maintain the numbers. It is inevitable that there will be cuts. Can we have an assurance from the Minister that when, sadly, there are cuts, there will be detailed explanations of the security and defence threats that we are leaving exposed in our foreign policy? We will know of such threats only at the end of a full SDSR taking place. I believe that the consensus view that we will need a lengthy debate at the end of that process is sound, and I will certainly be working through my channels to see whether we can have such a debate.

My Lords, I congratulate my noble friend Lord Sterling on securing this important debate. As the debate has proved, his Question undoubtedly reflects the considerable interest in the subject across the House, and rightly so.

Before I address my noble friend’s Question directly, I shall set the context. As noble Lords are aware, the National Security Adviser has been leading work on a national security capability review since July. It has been an important opportunity for the Government to conduct a thorough analysis of intensifying threats to national security and to consider their impact on the implementation of the 2015 national security strategy and strategic defence and security review.

Defence has played a major role in the capability review, contributing a huge amount of work. There can be no doubt that we will continue to build on elements of that good work after the review has drawn to a close, further exploring the opportunities for modernisation that have been identified.

However, it is important that I do not pre-empt the completion of the capability review. Ministers will discuss its conclusions in due course and will consider what needs to happen next. Precisely because of that, and because we believe that the last SDSR is a sound basis for the work that we are doing, I am sure that my noble friend will appreciate that I cannot stand here today and commit the Government to conducting a full defence review.

The substance of my noble friend’s Question is the capability of the Armed Forces to meet global defence needs, as he well articulated. Those defence needs, and indeed our wider foreign policy, begin with the three national security objectives set out in the 2015 national security strategy: protect our people, project our global influence and promote our prosperity. The Armed Forces, and the wider defence enterprise, make an expert and admirable contribution to the fulfilment of those objectives. That will not change.

The protection of our people is clearly at the very heart of what defence exists to do. At home, the Armed Forces contribute to the resilience of the UK. They support the police under Operation Temperer and hold 1,200 troops at very high readiness under government winter preparedness plans. Their outstanding support to UK overseas territories in the Caribbean last year, following Hurricane Irma, offers a remarkable example of their capabilities in this latter regard. In UK airspace and territorial waters, the Armed Forces keep a constant guard against threats. The recent images of HMS “Westminster” shadowing Russian warships through the Strait of Dover will be familiar.

Beyond our borders, the Armed Forces protect us through their potent deterrent effect. We tend to think first of the UK’s continuous at-sea deterrent, and more recently of our developing carrier strike capability. But every force element in our Armed Forces makes a vital contribution to our ability to deter. Wherever they are deployed, whatever task they are undertaking, the Armed Forces’ world-leading professionalism and skill send a powerful deterrent message to any would-be adversaries, and allow us to project our global influence.

In the latter context, our troops are building the capacity of our allies and partners across the world. In Iraq, the UK Armed Forces have helped to train over 60,000 Iraqi security forces. In Ukraine, the UK has provided defensive training in medical skills, logistics and counter-IED. We are training the Libyan coast guard, the Afghan security forces and the Nigerian armed forces, among very many more examples. Of course, the UK’s contribution to NATO and the UN reinforces international security and the multilateral institutions by which it is upheld. The UK is leading the NATO enhanced forward presence battle group in Estonia, commanding a significant proportion of NATO’s standing naval forces, and as my noble friend Lady Anelay reminded us, contributing to the UN Missions in South Sudan and Somalia.

Finally, defence makes a very large contribution to the prosperity of the UK. In December, the Secretary of State announced a huge £6 billion contract with Qatar for 24 Typhoon aircraft, a huge boost to UK aviation. Equally, contracts emerging from the national shipbuilding strategy—for the Type 26 and, as my noble friend Lady Wilcox rightly mentioned, the Type 31e—support thousands of UK jobs and hundreds of UK suppliers, as does the Ajax armoured fighting vehicle programme. The defence industrial policy was published in December. It sets out measures to help the UK defence sector to thrive on the global stage, including by supporting small and medium-sized enterprises, reinforcing critical skills and training, and increasing investment in defence innovation. I encourage noble Lords to seek it out.

These are our global defence needs. It is clear that the Armed Forces are meeting them. But changes in the global strategic context require changes in the way we conduct the business of defence and security. I have spoken in recent debates about increasing threats faced by the UK and its allies. I do not propose to repeat myself—I think we all agree that we have entered a period of sharply increased complexity and risk. The boundaries between competition, confrontation and conflict are becoming blurred, and the use of military and non-military capabilities is being blended. Our adversaries are investing heavily in traditional capabilities and in non-traditional tools, such as cyber and subversion. They are taking advantage of the proliferation of cheap yet sophisticated technology to exploit our existing vulnerabilities and to try to create new ones.

I will need to write to a number of noble Lords to give full answers to the questions put to me, but let me address at least some. First, there is the perennial question of the defence budget. Of course we must provide defence with sufficient resources to meet the country’s needs. But passionate as we may be about defence, we must do the same for health and social care, for education, for welfare and for civil infrastructure. Balancing those competing demands is the difficult business of government. I can, however, assure the noble Baroness, Lady Smith, and my noble friend Lord Trenchard that the defence budget is rising in real terms: £35 billion last year, £36 billion this year, £37 billion next year and £38 billion the year after that.

The noble and gallant Lord, Lord Craig, raised the subject of resilience. The need to maintain resilience—the ability to absorb the losses that you may suffer in theatre—is of course one that we fully recognise. I assure him that, as ever, it informs all deliberations on the structure of the UK’s Armed Forces as we go forward.

In answer to the noble Lord, Lord Touhig, in particular, the purpose of the NSCR is precisely to ensure that we have the right capabilities for the intensifying threats that we face, but also that we deliver those capabilities in the most appropriate ways.

The noble Viscount, Lord Waverley, raised the important issue of cyber. He will know that the National Cyber Security Strategy was published in the summer of 2016. It was largely welcomed at the time. It is being delivered through £1.9 billion of investment in the national cybersecurity programme. Investment from that programme is helping the MoD to deliver the new cybersecurity operating capability, and a defence cyber school will open this year. GCHQ and the MoD are working in partnership to deliver the national offensive cyber programme, so that we really do have a world-class offensive cyber capability.

My noble friend Lord Freeman spoke about supporting the aircraft carriers and asked how we would maintain both carriers and maintain worldwide reach. I assure him that operating both aircraft carriers is affordable. Work is being conducted as we speak to plan the most effective and coherent way to operate the capability.

In answer to the noble Lord, Lord Lee, who asked me about the propulsion systems on the Type 45, I can reassure him, I hope, in part, that Project Napier is addressing the reliability and resilience issues in the Type 45 destroyers. It is a programme that is progressing well and, if I may, I will write to him with further details.

We cannot and we will not allow the UK’s long-held military edge to be eroded, but maintaining our ability to meet those global defence needs and contribute to the national security objectives does not mean maintaining the status quo for our Armed Forces. It means upholding a long tradition of British innovation, harnessing new technologies and techniques. It means reinvigorating and reinforcing NATO, which maintains the bedrock of UK defence. It may also mean reprioritising how we allocate our resources to emphasise the most effective capabilities for the world in which we operate. We must consider the new threats that we face and the new opportunities for modernisation available to us. As the NSCR draws to a close, defence will continue to ask itself those questions and to build on the firm foundations that the review has laid down.

Sitting suspended.