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My hon. Friend is absolutely right to highlight the important role played by Sentinel aircraft based in his constituency. The contract is good news for the UK defence industry and it will sustain about 120 jobs at RAF Waddington in Lincolnshire, and about 40 jobs at Hawarden airfield in Broughton in north Wales.
The hon. Gentleman will know that there is a double lock in terms of the budget and that it is based not just on 2% of our economy, which I am pleased to say grew again in the third quarter. There is also a lock in terms of a rise of 0.5% above inflation every year to 2020.
Will my hon. Friend confirm that this issue arose from the first review for about 30 years to result in an increase, rather than a reduction, in the size of the armed forces? Does she agree that, as the world gets more dangerous, it is all the more important that we get more bang for the buck from every pound spent?
May I pay tribute to my hon. Friend for his efforts during his time at the Department? They resulted in the settlement in the 2015 autumn statement, which I mentioned earlier. He is absolutely right to say that defence spending is going up every year, and that is so that we can invest in the new Type 26 frigates, aircraft carriers, attack helicopters, fast jets, armoured vehicles and, as we heard last week, our cyber-defences.
May I begin by sending my condolences to the family and friends of Lance Corporal Joe Spencer, who was tragically killed at RAF Tain last week?
On Friday, I warmly welcomed the announcement that steel would be cut on the Type 26 frigates in summer 2017. However, I repeat my point that the contract remains unsigned, so will the Secretary of State get a move on and sign it? The defence procurement Minister said last year that Type 23s would be replaced by Type 26s on a like-for-like basis. Is that still the case?
I think I detected in that question a slight sliver of a welcome for the fact that my right hon. Friend the Secretary of State announced on Friday two decades’ worth of shipbuilding work on Type 26 frigates in Scotland. I remind the hon. Gentleman that none of that shipbuilding would have happened if he had achieved his desired outcome in the Scottish referendum.
Is it not the case that only the original order for 13 Type 26s would have kept the yards working until 2035? Now that there are only eight and there is no confirmation of the general purpose frigates, how can an order for just eight Type 26s secure two decades’ worth of work on the Clyde?
As the former Minister responsible for Type 26s, may I warmly welcome the order for them, although I and the nation could well do with more? I also welcome the decision to maintain defence expenditure at 2%, but may I remind my hon. Friend that last year that was done only by viring £1.2 billion of expenditure from the Department for Work and Pensions to the Minister of Defence? Why is it that I am hearing from senior officers that their budgets are being cut this year and that they are having to find in-year savings? Where is the extra cash?
I pay tribute to my hon. Friend for his enormous contribution. He has always made the case for a growing defence budget. I am sure that he, too, will welcome not only the announcement we made last week about the Type 26 frigates, but the announcement made at last year’s strategic defence and security review that we would develop a general purpose frigate and commit to at least five of those.
It is right that the Government are sticking to our NATO commitment to spend 2% of GDP on defence, but as the Select Committee on Defence has noted, the Government are doing so only by including areas that were not previously counted. Can the Minister tell us what defence expenditure would be as a percentage of GDP if we used the accounting rules that were used in 2010?