Skip to main content

Departmental Funding

Volume 616: debated on Monday 7 November 2016

11. What recent discussions he has had with the Chancellor of the Exchequer on the level of funding for his Department. (907102)

The Ministry of Defence meets the Treasury regularly as part of its routine business. The spending review set out the Ministry of Defence’s spending plans for the rest of this Parliament. The defence budget is growing at 0.5% above inflation each year until 2020. We also have access to the new joint security fund. These commitments mean that the defence budget will rise to almost £40 billion by the end of the decade.

I thank the Minister for her answer. I listened carefully to the answer she gave to my hon. Friend the Member for Blaenau Gwent (Nick Smith) on the cost of the pound and the purchasing power of the Ministry of Defence. The Royal United Services Institute has suggested that the purchasing power of the UK’s defence budget could be cut by 2% as a result of the fall in sterling. What plans do the Government have to offset that?

Again, I put on the record the fact that defence spending will go up regardless of currency fluctuations because of the double lock on the defence budget. As part of ongoing management of the budgets at the Ministry of Defence, we pay and have paid regard to the currency risk in terms of our procurement programme.

When Ministers meet the Chancellor of the Exchequer will they remind him that although the defence budget is going up in absolute terms it is nevertheless at a lower proportion of GDP than ever before? We really ought to be looking at something approaching the 3% mark, bearing in mind the fact that the level of threat we face today is similar to that of the 1980s, when we regularly spent between 4.5% and 5% of GDP on defence.

My right hon. Friend was calling for 5% the other day—“Go for five and stay alive” was the catchphrase he came up with, I think. He is right that it is important that we continue to keep the Ministry of Defence’s budget under review, and we were very pleased that last year the spending review committed to a rise of 0.5% above inflation every year during this Parliament. Another spending review will have to look at the budget again in due course.