Economy: Budget Statement - Motion to Take Note

Part of the debate – in the House of Lords at 5:05 pm on 13th November 2018.

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Photo of Lord West of Spithead Lord West of Spithead Labour 5:05 pm, 13th November 2018

My Lords, I know that the House would be disappointed if I did not refer to a naval anniversary, so I thought I would mention that 15 years ago today I accompanied Prince Michael of Kent when he rededicated the RN Division memorial on Horse Guards Parade, which is well worth a visit. The division was formed by Churchill in 1914 from battalions of sailors and Royal Marines. The Royal Naval Division fought in defence of Antwerp in 1914, at Gallipoli and on the Western Front from 1916 onwards as the 63rd Division. It is little known to the general public but it suffered huge casualties and was the most highly decorated division in World War I. But enough of this digression because I intend to talk about the impact of the Budget on defence.

There is a welcome change in that defence is actually mentioned in this Budget, which it has not been for the last two. I congratulate the right honourable Gavin Williamson on pressurising the Chancellor into giving the MoD some help, although I have to say that it does not resolve the deep-rooted parlous state it finds itself in. The right honourable Philip Hammond, when he was the Secretary of State for Defence, trumpeted about a spending black hole he had discovered and how cleverly he had sorted it out. The black hole, if it can be described as such, still exists and there is a £20 billion shortfall between the planned equipment programme and the funding available.

More damaging is the hollowing out of our Armed Forces that is being undertaken to achieve the promised efficiency savings that were predicated to make the MoD programme affordable. I do not believe that anyone really believed that they were achievable. However, it would be churlish to sniff at what has been given to us in this Budget. It is a significant sum of money.

Earlier this year, £800 million was given to bring forward the Dreadnought programme and now part of the £1 billion given in the Budget is apparently going the same way. Can I ask the Minister how much of the £1 billion that is being given is for the Dreadnought programme? The remainder is for anti-submarine warfare and cyber, both of which are crucial. We have seen a staggering growth in Russian submarine operations out of area. The Russians are operating off our west coast clearly hoping to stumble across our Trident submarines. Why would they be doing that? They are threatening our undersea cables. Why would they be doing that? We have seen nothing like this since the Cold War. As regards anti-submarine warfare, it is an art as well as a science, and at the end of the Cold War we were without a doubt the best proponents of that art in the world. We have lost that edge so the extra funding is very much to be welcomed.

What is unfortunate is that the clear national requirement for a minimum of eight nuclear attack submarines—I am not asking yet again for more ships; do not worry—and indeed programme plans for eight Astute-class craft has been watered down to seven. In a Written Answer to me, the Government stated that the MoD had always planned for seven. I have to say that that was certainly not the case when the Astute programme was started by a Conservative Government in the mid-1990s or post SDR 1998. There must have been some sort of lapse of memory in the MoD about that. As for cyber, we are among the best in the world but it is absolutely crucial that the MoD and GCHQ work closely alongside each other, and the money coming through in this Budget is very welcome to help those initiatives along.

But the problem of underfunding has not gone away. If the two tranches of money from the Treasury into the Dreadnought programme are an indicator that there is an acceptance that the capital cost of the new deterrent submarines should be funded outside the defence budget, I welcome it. That will make a dramatic difference to the MoD programme. This of course was the plan until changed by George Osborne in 2010. Can the Minister tell us whether it is now the plan again? I hope that it is.

The Armed Forces are at a cliff edge; they cannot do what our nation expects of them. It will be fascinating to see what comes out of the much-delayed modernising defence initiative, which was due to report this summer and will now presumably inform next year’s spending round. That spending round will be crucial for the future defence of our nation. The House of Commons Defence Committee and others have stated that the percentage of GDP spent on defence should be higher; indeed, the figure of 3% is being bandied around. I tend to shy away from percentages, but what is needed is a clear articulation of what exactly our nation needs in defence and security terms in a highly dangerous, chaotic and uncertain world—and what is necessary needs to be properly funded.

As a simple sailor, I am delighted to see the MoD gain something from the Budget, but I am not so simple that I cannot see that it is just a temporary sticking plaster. In the final analysis, we can be wealthy only if the security of our nation and its people and global stability are assured. Strong defence forces ensure that security.