CONSERVATIVE
New Forest East

DEFENCE EXPENDITURE (NATO TARGET) BILL – 23 October 2015

Dr Julian Lewis: It is possible to argue that my hon. Friend the Member for Aldershot (Sir Gerald Howarth) has already achieved one of the main aims of the Bill, because he originally chose the subject and sought the sponsorship, readily given, of people like me in support of his Bill before the Government gave their welcome pledge to meet the minimum 2% commitment not only for the year ahead but for the remainder of this Parliament, year after year after year. However, I believe he was right not to let the Bill drop, just as I believe that I was right to continue to sponsor it after becoming Chairman of the Defence Select Committee.

The reason that is right is that we must not assume that pledges given at one stage in the political and economic cycle will be good for ever after. It is a sad state of affairs that the word of politicians in government is no longer sufficiently trusted so one feels one must enshrine something in law in order for the electorate to believe that a promise will be kept.

My hon. Friend referred to two previous examples, one of which was to do with overseas aid. In that case, it was indeed a target to be met, not a minimum to avoid dipping below. The other was the referendum – the in/out referendum, let us be precise about it – on our continuing membership of the European Union. That is possibly where a lot of the scepticism crept in, and why trying to get commitments nailed down in law originally took hold.

I distinctly remember in earlier debates about European treaties that referenda were demanded. Parties, not least our former coalition partners the Liberal Democrats, refused demands for a referendum – on the Lisbon treaty, I think – because they felt that it was avoiding the real question, which was: “Should we stay in or leave the European Union?” But, strangely enough, when they had the opportunity to support having a referendum on staying in or leaving the EU, they opted to oppose it. It is that sort of cynicism, frankly, that makes it necessary for my hon. Friend to persist with his Bill, although, fortunately, the people who reneged on their pledge to have an in/out referendum are no longer in a position to hold the Government to ransom.

It was indeed the work of many hon. Members on both sides of the House, but not least that of my hon. Friend the Member for Aldershot, that ensured that the Government finally gave the 2% pledge. It would be unsuitable for me at this stage to go in any detail into the question of the extent to which creative accountancy may be involved in fulfilling that pledge, because one of the first two inquiries of the new Defence Select Committee is to examine that very issue.

Sir Edward Leigh: Apparently, the Secretary of State for International Development says that landing on 0.7% is like landing a helicopter on a moving handkerchief. The Ministry of Defence is an infinitely more complex Department, so are we not in danger of giving too much power to accountants in the MOD to try to land this helicopter on a moving aircraft carrier, creating chaos in the procurement process?

Dr Lewis: No, frankly, I do not think we are. That comes back to the fact that this is not a target that we have to hit precisely. This is a minimum – in my opinion and from my point of view, an inadequate minimum. It is much easier to land the helicopter on a deck when the deck is quite an enormous one: all we have to worry about is putting the helicopter down on some part of that enormous deck. We do not have to worry about which part of the deck we manage to alight upon. Therefore, should we end up spending, for example, 2.5%, 2.8% or 3%, we shall still have fulfilled the purposes of my hon. Friend’s Bill. At this point, it may be convenient to reflect on what the size of the deck of that carrier has been in decades gone by. Then, perhaps, we shall see that we should not be struggling to get on to the deck; on the contrary, we should be asking ourselves why we are engaged in achieving such a very modest aim.

Between 1955 and 1960, the percentage of GDP that we spent on defence varied from 7.2% to 5.9%. Between 1960 and 1969, it varied from 6.1% to 5%. From 1969 all the way until 1980, it varied from a high of 4.8% in 1975-76 to 4.2%. As recently as 1980-85, it varied from 5.1% to 4.7%, and in 1985-90, it varied from 4.6% to 3.9%. Even after the end of the cold war, in the period between 1990 and 1995, it varied from 4.1% to 3.2%. Not until the financial year 1994-95 did the figure dip below 3%. I would argue – and this was foreshadowed by my hon. Friend in his excellent speech – that a country with our level of commitments and responsibilities certainly ought to be thinking about spending 3% of GDP on defence.
The situation in terms of the threats that we face has become increasingly fraught. I, for one, was very surprised that only a year after the 2010 strategic defence and security review made what I think was an 8% cut in the defence budget, we were already keen to engage in an additional conflict in Libya, the wisdom of which has subsequently – and, in my view, rightly – been questioned. But whichever side we take in that particular argument, it follows that if we are in the business of still wishing to intervene, we must certainly be in the business of making the appropriate financial investment.

During one of the public hearings that we have held so far, it was pointed out that it is not enough simply to look at the amount of defence investment that we make, because it is possible to spend a lot of money on the wrong things and still end up with inadequately structured armed forces. If I may dip into history, I suspect that the Maginot line occupied a rather large chunk of the French military expenditure budget in the period leading up to the second world war. It was not a very good investment.

It is, of course, difficult to quantify outcomes when it comes to the appropriateness of the way in which money has been spent, but even if spending a lot of money on defence is not a sufficient condition for the achievement of good defence outcomes, it is certainly a necessary condition. Earlier, I described in detail what happened to the defence budget when it was in decline. Over the same period, our welfare budget ballooned, our education budget ballooned, and our health budget ballooned as percentages of GDP. I am not criticising that in any way, but it is rather extraordinary that that pattern of steep decline in spending on defence as a national priority has been allowed to occur, given the extent to which we have remained engaged in the carrying out of military activity from time to time on the world stage.

Embodying the proposal for 2% in law is a worthwhile endeavour because it will send a signal that any Government who wish to renege on the commitment will have to unpick the legislation in order to do so. It is unsatisfactory that we as a country cannot feel comfortable that defence occupies a sufficient role in our league table of commitments to spend from the public purse. As I said in an intervention, however, the endeavour of my hon. Friend the Member for Aldershot to ensure that the commitment is enshrined in law carries with it the risk that what should be a minimum will become a target. It is true to say that, from time to time, some of us on these Benches who take a particular interest in defence have been less than totally helpful towards those on the Front Bench when we have felt that their commitment to defence had fallen short of what it should be.

Around the time of the Wales summit, the Prime Minister made a statement about the importance of urging our NATO allies to meet the 2% minimum, and I decided to seize the opportunity to show my full support for those on my Front Bench by asking him an easy question. I got to my feet and the Prime Minister gave way graciously, as he always does. I asked him whether he would like to give the House an assurance that, as long as he remained Prime Minister, there would be no question of this country dipping below the 2% minimum. Rather to my discombobulation – [Hon. Members: “Sorry?”] I thought that would attract a bit of attention. Rather to my discombobulation, I was told that, although the commitment was being met that week and that year and was going to be met the following year, after that we would just have to wait and see. That prompted concern among a number of us that the commitment to the NATO minimum was in jeopardy.

I well remember how, during the long years of opposition, we used to excoriate the Labour Government for playing fast and loose with the figures relating to the GDP spend on defence. In particular, I remember one statement that Tony Blair made, I think in 2007 when he was coming to the end of his 10-year period in office as Prime Minister. He made a speech on HMS Albion, in which he said that, taking defence expenditure as a whole over the preceding 10 years of the Labour Government, it had remained roughly constant at about 2.5% of GDP if the costs of Iraq and Afghanistan were included. As a Member of the shadow Defence team, I was quick to point out that the costs of Iraq and Afghanistan were supposed to be met from the Treasury reserve funds, and that if they were stripped out of the picture, Labour was actually spending more like 2.1%, which was inadequate. I continued to make that point in speeches in the House over quite a long period – some would say an excessively long period.

What worries me about the debate on defence expenditure generally is that we are being subjected to the management of expectations. There should never have been the slightest doubt that this country would continue to meet the NATO minimum. We had always done so, and we never even had to think about doing it because we had always surpassed that level quite comfortably. It is a measure of the situation in which we find ourselves today that, as I said in earlier interventions, we are apparently supposed to be ringing the church bells in triumph that we are not going to dip below the NATO minimum.

Because of this undercutting of belief in what politicians do, compared with the commitments that they give, I think it is important that this Bill should go through. I therefore propose to set a good example to other right hon. and hon. Friends by keeping my remarks brief, because I would not like us to find that we were running out of time for the Bill to make the necessary progress that it needs to today. Not that I would ever think for one moment that the Government Whips Office would encourage people to expatiate excessively on this important subject, but just in case they might be tempted to do so, I wish to make that task as difficult as possible and will therefore conclude my contribution to the debate.