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House of Commons Hansard
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27 June 2016
Volume 612
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6. What estimate he has made of the projected increase in defence spending during this Parliament. [905478]

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7. What estimate he has made of the projected increase in defence spending during this Parliament. [905479]

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I will answer pithily. This Government are delivering stronger defence. The defence budget will rise by 0.5% above inflation every year to 2020-21, and we will access up to £1.5 billion a year from the joint security fund by the end of this Parliament. This is the first time in six years that the defence budget will increase in real terms.

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Given the vote last week, does the Minister agree that Britain should remain a key player on the international stage? Will Britain continue to use its influence to encourage our NATO allies to spend 2% of their GDP on defence?

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As my right hon. Friend the Secretary of State said earlier, NATO is the cornerstone of our defence, and we are leading players in influencing fellow NATO members to meet the spending commitment. Allies have made welcome progress since 2014; five now spend 2% of GDP on defence, eight spend 20% of their defence budgets on major equipment and research, 16 have increased defence spending in real terms and 24 are now spending more of their defence budgets on equipment.

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With the increasing budget comes increasing responsibility for ensuring value for money for taxpayers. Has my hon. Friend learned the lessons of failed procurement under Labour of maritime patrol aircraft, which had to be cancelled because the programme was 10 years behind and £800 million over budget?

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My hon. Friend and constituency neighbour is right that the Nimrod programme suffered repeated and unacceptable delays and cost overruns. The decision in 2010 to cancel it was difficult but the planned purchase of nine P-8 Poseidon aircraft for maritime patrol will give us the capability we need in the timeframe we want, and at best value for the taxpayer.

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Part of making sure defence spending is adequate is making sure that we get value for money. The Public Accounts Committee was very disturbed when we looked recently at housing management for service families, which seems to be woeful. The contractor, Carillion, has not stepped up to the job. Will the Minister tell me how he will ensure that we get value for money and, more importantly, a better service for our service families?

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I am pleased to confirm to the right hon. Lady that in the area of defence equipment procurement, for which I am responsible, the Public Accounts Committee has found that we have consistently brought programmes in within budget and with minimal time overruns. I accept we have more to do on housing.

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Where the defence budget is spent is absolutely crucial. Given the gross uncertainty for the British steel industry as a result of the EU referendum vote, what assurances on defence spending can the Minister give to steel manufacturers in this country to boost them at this crucial time?

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We have adopted the Government’s policy to ensure that defence contractors make all steel procurement opportunities available to UK producers. The amount of steel expected to be available for tender for future work is much reduced, because the most substantial amounts have been in the aircraft carrier programme and we will not be building vessels as big as that for the foreseeable future.

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I warmly welcome the Government’s commitment to spend at least 2% of GDP on defence, but will my hon. Friend confirm that this year and next there will be no increase in cash terms, and assure me that we will not find ourselves in the same situation as we did this year, where in order to meet our 2% commitment money was transferred to the Ministry of Defence from other Departments?

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As was made clear in last year’s comprehensive spending review at the same time as the strategic defence and security review, and as I have already said this afternoon, the defence budget is going up in real terms in each year of this Parliament.

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There has been much loose talk about the increase in the defence budget, but to be able to hit the target of 2% of GDP we now have to be very careful, as there may well be a recession given the Brexit vote. Will the Minister reassure the House, the public and the armed forces that the Government’s commitment on defence spending will be maintained not just in terms of GDP but in cash terms?

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I am not going to join those in the Opposition who seek to talk the economy down. We have a clear commitment to meet the NATO defence spending pledge and that is what we will do.