Defence Investment Plan

My Lords, the Chief of the Defence Staff has today given the International Relations and Defence Committee of this House stark evidence of what funding is needed and why we need it to maintain our defence capability. Does the Minister agree that, whatever ends up being in the defence investment plan, there must be an emphasis on funding ongoing operational activity such as boarding sanctioned tankers, paying for drones, equipping our serving Armed Forces personnel with everything they need to maintain operational readiness, and ensuring that our reserves are trained and equipped to optimise military and national resilience support? Does he accept that these are priorities?

The priorities, and the moneys for the future, will be laid out in the defence investment plan. The noble Baroness is right to point out some of the important capabilities we have to protect our country and to work with our allies. She was right, for example, to point to the importance of the reserves—it is good to see the noble Lord, Lord Lancaster, here—and to the ability to maintain our operational requirements. This goes back to a question asked by the noble and gallant Lord, Lord Stirrup, who is not in his place. As the DIP goes on, an important thing that will have to be wrestled with is the relationship between RDEL and CDEL, which is crucial to the way we will operate in the future.

My Lords, the Government have committed to increase defence spending to 3% by 2030 and to 3.5% by 2035. But what is required, and is chaotically missing, is a clear timeline that would enable the MoD and the defence industry to budget, plan and procure. Even if the DIP is published, as promised, before the NATO summit, it will not end the uncertainty. Holding out unspecified prospects for future spending does not really cut it. So when will the Government make a clear medium-term to long-term decision and remove damaging uncertainty for our defence industry and for other departments, which fear cuts, in order to fund what they do not know is happening?

Money for defence is already increasing, notwithstanding what happens in the DIP, which will further increase defence spending. In answer to various questions yesterday about defence spending going forward, I simply referred to what the Prime Minister told the BBC on Friday afternoon. The Prime Minister laid out that defence will be the number one priority in every spending review, including the next one, which, I remind the noble Lord and the House, will be in 2027. There is the additional commitment, which I made at NATO last year, to get to 3.5% by 2035. The commitment laid out by the Prime Minister to the BBC and Chris Mason was important.

My Lords, I have £50 billion in my back pocket. In 11 years’ time, my noble friend the Minister and every Member of this House will be able to get to Birmingham 20 minutes faster. Some £102 billion is due to be spent on HS2 going forward. If we cancel this project now, it will cost us £33 billion. The net saving will be somewhere between £50 billion and £70 billion. I ask my noble friend the Minister to take this away and see whether he can persuade his colleagues in the Cabinet to chop HS2, which is utterly useless, is going nowhere and was a bonkers vanity project right from the beginning. I invite him to do so.

That is the most difficult question I have had. The serious point, notwithstanding the debate around HS2, is the question of priorities within government. One of the issues that has caused some debate and discussion—I was asked a question about it—was that when the Government made the initial defence spending increase, it was funded by a reduction in the overseas development budget. Now, the debate and discussion are about how we can reprioritise within the existing government spending envelope and use money from other departments, particularly from capital, to spend in the defence investment plan. There is always debate and discussion about priorities within government, and, no doubt, that will continue.

My Lords, might not the Government find it a bit easier to deal with their problems explaining defence spending if they distinguished much more clearly between the overall defence of the nation—where the budget spreads across many departments and takes a variety of new forms that change all the time—and the MoD budget, which, just like general spending, is always in trouble? I see in today’s newspapers that more trouble is coming along.

It is an interesting idea. Indeed, the strategic defence review of the noble Lord, Lord Robertson, pointed out the contribution that many departments, not just the MoD, will make to homeland defence and the protection of critical defence infrastructure. In terms of what happens to the budgets, there will clearly have to be more co-ordination and work between government departments if we are to ensure that homeland defence and the security of our nation is what we want it to be.

My Lords, I thank the Minister for the answers he has given so far. I want to ask a question about service personnel retention; I declare an interest as the father of a soldier. The defence investment plan primarily addresses equipment, procurement and investment in research. However, one of the greatest challenges we face with the Armed Forces is retention and the general health and well-being of service people. Currently, the outflow before the end of their agreed engagement or commission stands at around 6%. What more can the Minister and His Majesty’s Government do to retain and support our service community?

We are taking a lot of action on recruitment and retention. To give a couple of examples in the short time I have, the announcement last week about the further increase to Armed Forces personnel pay was important, showing that the Government support and respect the work they do. There is also the work we are doing on military housing; that is an important statement as well. We are taking a variety of measures in a variety of ways to ensure the value that we all place upon our Armed Forces personnel.

One way of achieving the objectives that my noble friend spoke about, to give some certainty, could be for the UK to join the defence, security and resilience bank. In answer to a Question I asked on 19 May, the noble Lord, Lord Livermore, said that the Government had “no current plans” to join that bank. However, the Canadian High Commissioner said late last week that Gordon Brown had talked to Mark Carney about the UK joining the bank and that talks were ongoing between it, the Treasury and the Ministry of Defence. Can the Minister clear up for your Lordships’ House whether we are or are not seeking to join that bank?

I cannot say that we are seeking to join that bank, but within the MoD and across government there are considerations of what other mechanisms we might use to fund defence.

What is the defence intelligence assessment of the Treasury’s inexplicable decision not to fully fund the strategic defence review of the noble Lord, Lord Robertson? If it is purely to force change on the Ministry of Defence and move from legacy systems to innovation, surely, that is a rather blunt instrument—or have I missed the point somewhere along the line?

I thank the noble Lord for his question. The original assumption was that we would look towards 2035 as when we need to be ready. However, with the intelligence and the work being done, we are looking more towards 2030, and that is in addition to what we do now. Those are the parameters within which government is operating, and that is the work the DIP seeks to address.

My Lords, does my noble friend agree that it is not just about how much we spend but ensuring that it is spent effectively? What is being done within the MoD to ensure that procurement is improved? Perhaps he might consult our noble friend Lord Drayson, who was a very good Procurement Minister. Will he also explain why we have more civil servants in the MoD than we have soldiers, and more admirals than we have ships?

We are trying to increase the number of ships, so hopefully in the end we will catch up. The personnel we have, we seek to employ gainfully. We have reformed and changed how procurement operates within the MoD. We have a new national armaments director running a National Armaments Directorate, which is seeking to reform and change how we procure so that we ensure that whatever money is spent is spent as effectively and efficiently as it can be.