UK Defence Spending — House of Commons, 2021-06-24
Topic: Defense
Kevan David Jones (Labour, Centre-left): My right hon. Friend is right, and those chickens are now coming home to roost with some of those programmes. That adds cost, but the main effect was that we saw a 45,000 cut to the Army. Despite the fact that the Conservative party in opposition, when I was a Defence Minister, called for an increase in the Army and an increase in the defence budget—an increase in everything—the first thing it did in government, under the smokescreen of this fictitious £38 billion black hole, was to cut the defence budget. Now we have a situation in which the Army is going to be reduced by another 10,000. Alongside that, we had compulsory redundancies, in-year budgets cut at short notice, and ridiculous decisions taken, for example on Nimrod and Harrier, which were scrapped at a moment’s notice. That had a real effect on the capabilities of our armed forces, as my right hon. Friend has just outlined Then we come to the equipment plan. Again, I suggest that anyone who wants to understand the defence budget should always read the NAO reports. The NAO is very clear that the equipment plan, as outlined at the moment, is unaffordable. It has been like that for the last four years, and there is no sign that it is going to improve. According to the last report—these are the MOD’s figures, I hasten to add; I am not adding to the fiction—there is a £13 billion black hole in the current equipment plan. The security and defence review—the integrated review—was supposed to look at that. The one thing I was calling for from that, as I think a lot of people were, was some reality: "What are you going to cancel out of the budget to get it back in balance? Will you actually say what you will do?" It did not take the opportunity to do that. The other startling thing from the most recent report is that the efficiencies that were supposedly built in to make the equipment plan affordable have been completely ignored by the Ministry of Defence How did we get to this place? Again, we have to look at the history of what the Government have done over the last 10 years. They introduced the Levene review, which pushed the top-level budget holders back to the military and reduced control at the centre. The latest report shows that nearly a third of the accountancy positions in the top-level budgets in the RAF, Army and Royal Navy are vacant, so there is not that control. I said at the time that I thought the Levene review was misguided. It has left the centre with very little control over some of these issues We then had the ludicrous decision, thanks to the Liberal Democrats in the coalition Government, to delay the ordering of the Successor class for the nuclear deterrent, which has led to our existing deterrent having to be extended, at huge cost. Without the ability to look in detail at driving down some of these costs, even with the increase that has been made, I do not think that the equipment budget will be affordable. The way the MOD does its budgets needs fundamental reform Why does this matter at the end of the day? It matters for two reasons. First, as my right hon. Friend the Member for Warley (John Spellar) has just said, it leads to a situation in which the men and women of our armed forces do not have the right equipment. It is also inefficient, because it pushes things to the right, and we end up with those us who argue for more money for defence facing people who say, "Why should we give it, if you have this chaotic system?" However, it is even worse than that. This relates to the equipment we are ordering. A very good report was written by the right hon. Member for Ludlow (Philip Dunne) on prosperity. I am a believer. The Prime Minister thinks that now in this golden age after Brexit we should buy British—but the MOD is doing completely the opposite. It seems to buy American. Recently, we have had Wedgetail, the maritime patrol aircraft and Apache helicopters all purchased from the United States in a Government-to-Government contract People ask, "Why does that matter?" It does matter. First, because we are not supporting British jobs. Unlike other nations that insist on a work share, as the Indians did with their P-8s, we do nothing at all, so we are left completely wide open not just to our industrial base being denuded, but to foreign exchange fluctuations. That is of huge interest in terms of the defence budget. If we look at it as a whole, US content is 31% now—it was 10% in 2006—and we are opening ourselves up to the fluctuations of the currency markets. That is money that should be going into our frontline services, but it will not be. No explanation has been given to me as to why we have suddenly gone down that path, and why we have not insisted that the US companies we buy from have to work in the UK. That is inexcusable, but it is a clear decision taken by the MOD that exports British jobs to the United States but also makes our defence budget very vulnerable to currency fluctuations.