CONSERVATIVE
New Forest East

NATO & DEFENCE EXPENDITURE – 20 June 2018

Dr Julian Lewis: I believe that I am right in saying that this is the third defence debate this year to be held in the main Chamber and if the opening speeches –

Madam Deputy Speaker (Dame Eleanor Laing): Order. I apologise for interrupting the right hon. Gentleman just as he is starting. I had omitted to tell him and the House that there has to be an initial time limit of seven minutes, which will begin not from when the right hon. Gentleman started, but from now.

Dr Lewis: That is very generous of you, Madam Deputy Speaker.

If the opening speeches in this debate are anything to go by, I think that the temperature will be very similar to that of the first two debates and show a welcome unanimity on both sides of the House about the importance of defence investment in peacetime to ensure that we minimise the chances of conflict breaking out.

The shadow Secretary of State referred to the importance of investing in the whole range of conventional capabilities. As far as I can see, that is common ground among all the main parties in this House, even though there are differences of opinion about the nuclear dimension. The difficulty that we face is that defence investment costs a lot of money, and defence inflation has been running ahead of defence investment. As a result, we repeatedly hear phrases such as “hollowing out” and “black holes in the budget”. It was useful that she said that she felt that defence investment, in real terms, had fallen by about £10 billion.

I do not think I am giving away anything more than I should by saying that in a few days’ time the Defence Committee will publish a new report entitled, Indispensable Allies, referring to the defence relationship between the United States, the United Kingdom ‚Äčand NATO. In that report, we do some calculations and projections about defence investment. We can see that at every level at which we estimate gross domestic product to grow over the next few years, an extra 0.5% of GDP equates, roughly speaking, to £10 billion. That is why when my hon. Friend the Member for North Wiltshire (James Gray) referred to the need to move towards 2.5% or 3% of GDP, we understood the sorts of figures that we are aiming to achieve.

It was slightly unfortunate that when we published our most recent report, “Beyond 2 per cent”, a few days ago, it coincided with the welcome announcement that £20 billion will be found for investment in the national health service. As I said in an intervention, while we obviously welcome the investment that is made in other high-spending Departments, it is important to remember how defence used to compare with those other calls on our Exchequer. At the time of the cold war in the 1980s, which is in the memory of most of us sitting in this House today, we spent roughly the same on health, on education and on defence. Now we spend multiples more on activities other than defence. Indeed, welfare – on which we used to spend 6% in the 1960s, just as we spent 6% on defence at that time – now takes up six times as much of our national wealth as does defence. So it is fairly easy to see that, by any standard of comparison, defence has fallen down the scale of our national priorities.

We have been very focused on Europe today because of the debate that took place immediately prior to this debate. It is worth reminding ourselves of the steps that led to the foundation of NATO. This may come as a slight surprise to some Members, but it actually goes back to the end of 1941, when three small European countries, Norway, Belgium and the Netherlands – who had all been overrun by Nazi Germany and whose Foreign Ministers were taking shelter in London – made an approach to the British Foreign Office. They said,

“We’ve tried being neutral. We’ve tried keeping out of power politics. It has failed. Our countries have been occupied by brutal aggressors. When this terrible war is over, we want Britain to have permanent military bases on our territory so that we can never be caught out like this again.”

It was from that invitation given to the United Kingdom to base military forces in countries that had put their trust in pacifism and neutralism, and had that trust betrayed, that NATO ultimately came into existence.

The Secretary of State began by paying tribute to the people who made the ultimate sacrifice in a time of war. It is certainly the case that when a war breaks out, there is no shortage of people willing to make that sacrifice, and what is more, there is no shortage of money to be invested in fighting and winning that conflict. The question that always faces us is what to do in peacetime. There is a paradox of peacetime preparedness, if Members will excuse the alliteration, which is that we prepare by investing in armed forces that we hope will never be used. That is what we have to do, and it is a difficult battle to fight to persuade people in peacetime to invest money in things that we hope we will not have to send into action.

Martin Docherty-Hughes: In terms of future investment in something that we do not want to have to use, does the right hon. Gentleman ‚Äčappreciate that some of that future investment could be lost through dollar dependency in the equipment plan, meaning that any additional moneys coming from the Government would be lost and have no long-term benefit?

Dr Lewis: Yes. The hon. Gentleman, who is a valued member of the Defence Committee, has argued that point consistently on the Committee. The Government certainly need to bear that in mind when placing orders for expensive new equipment, at least during a period of uncertainty when there is doubt that the pound will hold its value against another currency.

In conclusion, we have an opportunity in this NATO summit to show that we are leading by example. It was never the case that we were anywhere near the NATO minimum of defence expenditure. It was always the case that we were second only to the Americans. We must try to restore that situation, and that means raising more money for defence and spending more money on defence. Spending 2.5% of GDP will restore us to where we were a few years ago; 3% of GDP should be our target, because only that way can we be ready for the threats that sadly face us today and show no sign whatever of diminishing.