Defence and Security

Statement

19:40:00

My Lords, I will repeat the Statement made by the Prime Minister yesterday on defence and security: “It is three years since Russia launched its vile assault on Ukraine and I would like to address the international situation and the implications for Britain’s national security. In my first week as Prime Minister, I travelled to the NATO summit in Washington with a simple message: NATO and our allies could trust that this Government would fulfil Britain’s and, indeed, the Labour Party’s, historic role of putting our collective security first. I spoke of my great pride in leading the party that was a founding member of NATO, the inheritor of the legacy of Clement Attlee and Ernest Bevin, who not only stood behind Winston Churchill in wartime but won the peace by establishing the great post-war order here and abroad. It is a proud legacy, but in a world like ours it is also a heavy one, because the historical load that we must carry to fulfil our duty is not as light as it once was. We must bend our backs across this House, because these times demand a united Britain and we must deploy all our resources to achieve security. As a young man, I vividly remember the Berlin Wall coming down. It felt as if we were casting off the shackles of history; a continent united by freedom and democracy. If you had told me then that in my lifetime we would see Russian tanks rolling into European cities again, I would not have believed you. Yet here we are, in a world where everything has changed, because three years ago that is exactly what happened. Britain can be proud of our response. British families opened their doors to fleeing Ukrainians, with the yellow and light blue flags fluttering on town halls and churches the length and breadth of the country. The party opposite in government were robust in our response. I supported that in opposition and I applaud them for it now. We have built on that, bringing our support for Ukraine to a record level this year. We should not pretend that any of this has been easy. Working people have already felt the cost of Russian actions through rising prices and bills. None the less, one of the great lessons of our history is that instability in Europe will always wash up on our shores and that tyrants like Putin respond only to strength. Russia is a menace in our waters, in our airspace and on our streets. It has launched cyberattacks on our NHS and—only seven years ago—a chemical weapons attack on the streets of Salisbury. We must stand with Ukraine, because if we do not achieve a lasting peace then the economic instability and the threats to our security will only grow. And so, as the nature of that conflict changes, as it has in recent weeks, it brings our response into sharper focus; a new era that we must meet—as we have so often in the past—together and with strength. The fundamentals of British strategy are unchanged. I know that the current moment is volatile, but there is still no good reason why they cannot endure, so let me now spell out to the House exactly how we will renew them for these times. First, NATO is the bedrock of our security and will remain so. It has brought peace for 75 years. It is as important today as the day on which it was founded. Putin thought he would weaken NATO; he has achieved the exact opposite. It remains the organisation that receives the vast bulk of our defence effort in every domain, and that must continue. Secondly, we must reject any false choice between our allies—between one side of the Atlantic or the other. That is against our history, country and party, because it is against our fundamental national interest. The US is our most important bilateral alliance. It straddles everything from nuclear technology to NATO, Five Eyes, AUKUS and beyond. It has survived countless external challenges in the past. We have fought wars together. We are the closest partners in trade, growth and security. So this week, when I meet President Trump, I will be clear. I want this relationship to go from strength to strength. But strength in this world also depends on a new alliance with Europe. As I said in Paris last week, our commitment to European defence and security is unwavering, but now is the time to deepen it. We will find new ways to work together on our collective interests and threats, protecting our borders, bringing our companies together and seeking out new opportunities for growth. Thirdly, we seek peace, not conflict, and we believe in the power of diplomacy to deliver that end. That of course is most pressing in Ukraine. Nobody in this House or this country wants the bloodshed to continue—nobody. I have seen the devastation in Ukraine at first hand. What you see in places such as Bucha never leaves you. But for peace to endure in Ukraine and beyond, we need deterrence. I know that this House will endorse the principle of winning peace through strength, so we will continue to stand behind the people of Ukraine. We must ensure that they negotiate their own future, and we will continue to put them in the strongest position for a lasting peace. Fourthly, we must change our national security posture, because a generational challenge requires a generational response. That will demand some extremely difficult and painful choices, and through those choices, as hard as they are, we must also seek unity—a whole-society effort that will reach into the lives, the industries and the homes of the British people. I started this Statement by recalling the era of Attlee and Bevin, and this year we will mark many anniversaries of that greatest generation. We must find courage in our history and courage in who we are as a nation, because courage is what our own era now demands of us. So, starting today, this Government will begin the biggest sustained increase in defence spending since the end of the Cold War. We will deliver our commitment to spend 2.5% of GDP on defence, but we will bring it forward so that we reach that level in 2027, and we will maintain that for the rest of this Parliament. Let me spell that out: that means spending £13.4 billion more on defence every year from 2027. However, we also face enemies that are sophisticated in cyberattacks, sabotage and even assassination, so our intelligence and security services are an increasingly vital part of protecting both us and our allies. On top of the funding of 2.5% that I have announced, going forward, we will recognise the incredible contribution of our intelligence and security services to the defence of our nation, which means that, taken together, we will be spending 2.6% on defence from 2027. We must go further still. I have long argued that, in the face of ongoing and generational challenges, all European allies must step up and do more for our own defence. Subject to economic and fiscal conditions, and aligned with our strategic and operational needs, we will also set a clear ambition for defence spending to rise to 3% of GDP in the next Parliament. I want to be very clear: the nature of warfare has changed significantly. That is clear from the battleground in Ukraine, so we must modernise and reform our capabilities as we invest. I equally want to be very clear that, like with any other investment we make, we seek value for money. That is why we are putting in place a new defence reform and efficiency plan, led jointly by my right honourable friends the Chancellor and the Defence Secretary. This investment means that the UK will strengthen its position as a leader of NATO and in the collective defence of our continent, and we should welcome that role. It is good for our national security. It is also good for this Government’s defining mission to restore growth to our economy, and we should be optimistic about what it can deliver in those terms. Yet, in the short term, it can be funded only through hard choices. In this case, that means that we will cut our spending on development assistance, moving from 0.5% of GNI today to 0.3% in 2027, fully funding our increased investment in defence. I want to be clear to the House that this is not an announcement I am happy to make. I am proud of our pioneering record on overseas development, and we will continue to play a key humanitarian role in Sudan, Ukraine and Gaza, in tackling climate change and in supporting multinational efforts on global health and challenges such as vaccination. In recent years the development budget was also redirected towards the asylum backlog, paying for hotels. So, as we are clearing that backlog at a record pace, there are efficiencies that will reduce the need to spend on our overseas programme. None the less it remains a cut, and I will not pretend otherwise. We will do everything we can to return to a world where that is not the case and we can build our capacity on development, but at times like this the defence and security of the British people must always come first. That is the number one priority of this Government. It is not just about spending. Our whole approach to national security must now change. We all have to ask British industry, British universities, British businesses and the British people to play a bigger part and use this to renew the social contract of our nation—the rights and responsibilities that we owe to one another. The first test of our defence policy is of course whether it keeps our country safe, but the second should be whether it improves the conditions of the British people. Does it help to provide the economic security that working people need? Ultimately, as Attlee and Bevin knew, that is fundamental to national security as well. We will use this investment as an opportunity that will translate defence spending into British growth and British jobs, British skills and British innovation, and will use the full powers of the Procurement Act to rebuild our industrial base. As a strategic defence review is well under way, and across government we are conducting a number of other reviews relevant to national security, it is obvious that these reviews must pull together. So, before the NATO summit in June, we will publish a single national security strategy and bring it to this House. As I said earlier, that is how we must meet the threats of this age: together and with strength; a new approach to defence; a revival of our industrial base; a deepening of our alliances; the instruments of our national power brought together; creating opportunity; reassuring our allies; and delivering security for our country. At moments like this in our past, Britain has stood up to be counted. It has come together and demonstrated strength. That is what the security of the country needs now, and that is what this Government will deliver. I commend this Statement to the House”.

19:52:00

My Lords, I thank the noble Baroness for repeating this eloquent and important Statement. In the three years since Putin’s tanks rolled into Ukraine, imagining then an easy victory, his brutal war still grinds on, at an immense cost to the Russian people, let alone the brave people of Ukraine. In all this time, the House has been united in its support for those brave people, and that will not change. The Leader of the House was staunch in her support when I sat in her place, and I assure her that we on this side will not be lacking in our support for the Prime Minister when he does the right thing, as he has in this very welcome Statement. It was the Conservative Government—yes, I will dare to speak his name—of Boris Johnson who led from the front, sending weapons before the invasion and helping to stop the first assaults while others then hesitated. Thereafter, under successive Governments, Conservative and Labour together, the United Kingdom has taken in many refugees, delivered immense military aid to Ukraine and sanctioned those who have aided Putin’s war machine. This House stands united and unfaltering beside the Ukrainian people today. We also agree with the Prime Minister: in this troubled world, we must do more to ensure our own security. As my right honourable friend the leader of the Opposition set out yesterday, we must now accept reality. We must speak the truth. We must acknowledge that the world has changed. We must be ready to face the inescapable challenges that lie ahead. The primary purpose of a nation is to protect and defend our borders, our values and our people. That is why we welcome the announcement that the defence budget will be increased. In the face of the assertiveness of Russia and China, we can no longer live off the post-Cold War inheritance of Thatcher and Reagan. We commend the Prime Minister on his decision to boost spending on our Armed Forces. We on this side see the necessity of some trade off of soft power for hard. Indeed, my right honourable friend Kemi Badenoch urged the financial measure, however difficult, that the Prime Minister has now adopted. Although we believe the Government have made the right decision in relation to aid, the Statement raises some questions, which need clarification. The Statement says the increase will be funded by a reduction in aid spending from 0.5% of GDP to 0.3%. Based on figures in the Autumn Budget, that would free up some £5.3 billion towards the increase in defence. That is in line with the clarification by the Defence Secretary that the real increase, factoring in inflation, is closer to £6 billion. That is very welcome, but it is not the £13.4 billion claimed in the Statement. Can the noble Baroness explain the disparity in the two figures? The second point requiring clarification is how this money will be allocated. I do not expect the noble Baroness to be able to answer that now. The Statement says the strategic defence review is well under way, but that a single national security strategy will be published before the NATO summit in June. Does that mean the previous commitment to publish a strategic defence review in the spring is now delayed? Will the review reflect on the significant implications of British troops being sent on wider deployments in Europe? A key aspect of defence is sending the right signals. Percentage points are not the heart of the matter, which is people and materiel. Urgent procurement decisions need to be taken. Can the noble Baroness assure the House that they are not being delayed? Finally, the Government still seem to be committed to the extraordinary plan to surrender the Chagos Islands and pay £9 billion for the privilege. As a matter of fact, what is the figure? Presumably, when the Prime Minister sits down with President Trump and the President asks him, as he surely will, “So, Keir, what’s this deal costing?”, surely the Prime Minister cannot credibly say “I can’t tell you”. If the President can be told, then surely this Parliament can be told, so will the noble Baroness tell us? The Prime Minister was evasive earlier when asked whether any of the money the Government want to pay to Mauritius to lease back a base we presently own will come out of the defence budget. Will any of the costs be paid from the defence budget or not? No doubt the President will ask the Prime Minister. Can this House have the answer? The Prime Minister is right: we face an ever more dangerous world. This is the fundament of the matter. He is right about the importance of NATO—something all the parties in this House have always cherished. Let no one doubt that Britain stands by our allies. As I said on a recent Statement, there can be no peace without Ukraine. The Prime Minister was also right when he said that any Government’s first duty is the defence of their country. We on this side will stand with the Government when they do the right thing, as they are now. We will always share with them putting the national interest first.

My Lords, we welcome this Statement. From the outset of the brutal Russian invasion of Ukraine, there has been a consensus across Parliament that we must support the Ukrainian people in their struggle against aggression. We do so not just because they deserve our support in their own right but because success for Putin in Ukraine would simply be a prelude to further Russian expansionism, whether in the Baltics, the Caucasus or elsewhere in eastern Europe. Nothing which has happened in Ukraine over the past three years has caused us to question this approach—quite the opposite. What has changed is the posture of the United States. It is now clear that European nations cannot continue to rely on the US to support the defence of the continent in the same way as we did in the past. From day to day, it is impossible to know quite what the US President will say next, but in one respect President Trump has been consistent: he expects Europe to pay more for its own defence and he will make the continuation of the US’s military commitments in Europe contingent on this. We and other European nations are going to have to spend more—considerably more—on defence, and to do so at a time when public sector finances are already under considerable strain. We therefore welcome the Government’s decision to move to a level of defence expenditure of 2.5% of GDP by 2027, and their further aim of getting to 3% in the next Parliament. We need to considerably increase our capabilities and replenish our equipment stocks. As a first priority, the Government should reverse the 10,000 reduction in the number of our troops, over which the previous Administration presided. It is now highly likely that we are going to have to provide boots on the ground in Ukraine; the Army is simply too small at present to be able to do this on anything like the scale required. We must also, however, achieve much greater value for money on equipment development and procurement than we have in the past. We therefore welcome the Government’s commitment to a new defence reform and efficiency plan. We are, however, surprised and disappointed that the Government have decided that the entire funding of this additional expenditure should come from further cuts to development assistance. This seems to be a strategic error as it will simply reduce further our soft power, leaving space for Russia and China in particular to fill. Given that most aid is preventive of disease, climate change or conflict, it will exacerbate problems which will spill over to us. That is a false economy. Can the Government, at the very least, commit to protecting expenditure on Sudan—not just prioritising it, which is a rather weaselly phrase—given the extraordinarily severe humanitarian crisis now facing that country? We have suggested funding the increase to 2.5% in a different way—by an increase in the digital services tax from 2% to 10%—but there are other ways of raising the necessary revenue, as we suggested in our general election manifesto, which could be deployed without raiding the aid budget. As for the 3%, we have already suggested that there should now be urgent all-party talks to explore how we can achieve that on a cross-party basis. Can the noble Baroness the Leader say whether the Government have any plans to adopt this approach? Further to the Question earlier today in your Lordships’ House on the £20 billion of frozen Russian assets in western banks, there is agreement that those should be released to help Ukraine in its continuing military activities and to help rebuild the country once hostilities end. Frankly, nothing seems to be happening to achieve this. The Prime Minister could play a leadership role here by convening a European conference in London to agree on how this can best be achieved and by raising it tomorrow with President Trump. Do the Government have any plans to take such initiatives? Faced with the changed US posture on European security, all European nations will have to play a greater part in the continent’s defence. This Statement demonstrates that the UK is willing to make that commitment, and we support that stance, but let us not do so by further decimating our aid budget and making some of the world’s poorest people pay.

My Lords, I thank both noble Lords for their comments, in particular their support for the increase in defence spending. It has been important that since my time as Leader of the Opposition, as the noble Lord, Lord True, said, the House has always been united on this issue. In fact, the whole of Parliament has been united. Many noble Lords will recall when President Zelensky spoke in the House of Commons and some of us were fortunate to meet him afterwards. I remember him coming to a Cabinet meeting shortly after the election, as I know he did with the previous Government. But at all times, it is not just the Government but the entire country and the entirety of Parliament supporting the Ukrainian people. That is an important message—and not just to Ukraine. It is also a very important message to President Putin, because we stand united in support of the self-determination of the Ukrainian people. Their security and safety is of the utmost importance, and that concerns people in this country. The noble Lord also referred to families taking in Ukrainians who have had to flee their homes. Friends of mine did so. There is enormous pride in the work that they did, but they benefited and gained from hosting a family that was fleeing from such terror and violence. I turn to the specific points the noble Lords made. It is not GDP for the ODA but GNI—a different measurement. I had to look it up as well to tell the difference. On how the additional spending is allocated, the strategic defence review—I am pleased to see the noble Lord, Lord Robertson, who has led on that, in his place—will lead. I made the point that it is not just the amount of money: how it is spent and used is crucial. That will be aligned with the comprehensive spending review as well, so it is very important that we look at them in the whole, and we will get more information on that. The noble Lord asked specifically about the money. I am fortunate in having the Defence Minister alongside me today, and I can say that it is a £13.5 billion increase in cash terms from the Budget now to the Budget in 2027, which takes us to 2.5% of GDP in April 2027. He will have heard the Prime Minister’s words that we know we have to go further than that but, on the timescale, we need to ramp up that kind of spending to get the right supply chains, training and recruitment in place. We have heard many times in this House about the lack of recruitment and retention in our Armed Forces, and it is very important that we plan that carefully. The strategic defence review will be crucial to that. I thank the noble Lord, Lord Newby, for his comments. His words about solidarity with the people of Ukraine were important, and he had wise words about how President Putin would take advantage of any weakness in Europe. Strength within Europe is really important. It is not just for the people of Ukraine but for our domestic safety and security as well. He asked specifically about the funding from the ODA. As the Prime Minister said, these choices are not easy, but the primary objective is the defence, security and safety of this country. I can say to the noble Lord that this will not come into effect until 2027, so the current programmes for 2025 and 2026 remain in place. The protected areas are in Sudan, Ukraine and Gaza. The focus as we plan ahead—there is a particular strategic review on this in the FCDO—will be the planning of how this will happen, working with partners, and we will focus on the impact and outcomes of projects. I can also say to him that the legislation remains in place. We remain committed to 0.7% and want to get back to it, because we recognise that we have a proud history in our party. We are very proud of our role on this, so it is not a decision taken lightly. As we have said, this is a generational shift, a generational change, and we have to respond to it in the most positive way possible. That is why it is so important that we see the increase in defence spending announced today.

20:08:00

My Lords, I welcome the increase in defence spending which has been announced. I hope that the money will be spent effectively, and I hope that others in Europe will take this sign and also raise their defence spending. Armed as he now is with this new commitment, when the Prime Minister goes to Washington later this week will he impress on President Trump that Russia is the aggressor in Ukraine; that the defence of Europe benefits the defence of America; and that the Ukrainians are fighting for their independence and their sovereignty, principles which should be defended by all of us who value or benefit from economic and democratic freedom?

I thank the noble Baroness for her comments. She is right: how money is spent is so important. That is why I made the comment about the strategic defence review. I think the Prime Minister is in flight at the moment on his way to Washington; if he has not arrived, he will be arriving shortly. He has been very clear in his comments over the last few days about Ukraine and how the sovereignty of Ukraine is really important. I am sure that will form part of his discussions with President Trump.

My Lords, I will raise two brief but important points. I accept entirely that we should make savings to pay for the resources we are giving to defence, and I entirely support the strongest possible support for Ukraine. However, I do not understand why all the savings are concentrated on overseas aid. Out of the whole government budget, why are we concentrating just on overseas aid? Given all the things that we have said on the importance of overseas aid —on both sides of the House; I can see noble Lords here who have spoken on this—it does not seem to be in proportion. We are in danger of affecting the poorest people in some of the poorest nations in the world, very much to their detriment. Britain has—or had—a very high reputation in this area. My concern is: will this new concentration on cutting overseas aid alone not take away from that reputation? Above all, will it not encourage other nations, which have so far not been very happy on overseas aid, health aid or anything of that sort, to follow suit? That is the question that I think the noble Baroness needs to answer.

I thank the noble Lord for his comments and his support for the additional funding. I think our reputation is enhanced because we are, by having additional spending on defence, standing up to Russian aggression and making that very clear. They are difficult choices; I do not shy away from that at all. That is why we are saying how we will manage the cuts in ODA at this time. It is not a permanent cut; the legislation remains in place and we wish to return to that. There is a trade-off between diplomacy, aid—I do not always like to use the term “aid”, because in many cases it is not aid but support—development and defence. At this time, the threat is such and the moment is such—it is a generational shift—that we are focusing on the defence budget. We will be informed on how that is used by the strategic defence review. As I have said to noble Lords already, we will also look at the areas that will be protected in the ODA budget. The work of the Government goes on in working with those countries to ensure that we become a force for good and take a leadership role in those areas.

My Lords, I refer to my entry in the register of interests: I am the chair of Christian Aid. I am very privileged to follow the noble Lord, Lord Fowler, because I think we need to reject this false choice between defence spending and development spending. They are not competing priorities. This is not just about reputation. Properly used development funding helps to prevent conflict. It tackles instability and provides a greater and more just world. We have heard the concern that cutting aid in this way risks exacerbating instability and leads to conflict. Will the Government not just make an assessment of the outcomes of this cut in funding but make a proper assessment about the risk of increased insecurity, instability and conflict as a result of the cut?

I thank the right reverend Prelate for her comments. She asked how the assessment will be made. It will be made on the overall outcomes of the impact that the cut will have and how best to ensure that the best use of the money is being made. We are still talking about £9 billion of international aid, which will go into a range of projects. Between now and 2027 there is an opportunity to look at that, and the FCDO is actively undertaking that work at the moment. She is right; these are difficult and hard decisions that must be made, but we have to ensure that we stand to protect the nation and the safety and security of our citizens and those in other countries.

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We will hear from the noble Lord, Lord Beamish.

My Lords, as chair of the Intelligence and Security Committee, I welcome the emphasis in the Statement on our security services and the extra funding for them. The threat to us from Russia is not only on the eastern European border but on our own homeland through cybersecurity and other threats. Does the Leader of the House agree with me that we will have to keep this under review? Our security services are doing a fantastic job, but they are very busy countering state threats, including Islamic terrorism and right-wing extremism, so we may well have to look again at whether more funding will be needed in future.

I am grateful to the noble Lord for his comments, which come from his experience on the committee. He is right to highlight the threats that exist. People sometimes think that threats in relation to defence issues are happening to other countries and other people—but, no, they happen to us as well. We have seen people attacked in this country because of Russian aggression, including with the Salisbury poisonings. We should not forget that the fundamental first duty of any Government is the safety and security of their own citizens. He also makes the important point that this is not just about the military might of a country; it is also about how we use our equipment and personnel, as well as intelligence and modern technology. Bringing security, in its widest sense, into defence spending—not as part of, but above, the 2.5%—will be very important. Unless we take a stand to show that we are determined and have the ability, the will and the finances to protect our citizens, we will not get respect across the entire world. We have to take the leadership role today that we need to take, and we are able to do so today.

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My Lords, we have plenty of time. We will hear from the Liberal Democrat Benches next, and then we will hear from the noble Lord, Lord Howard.

My Lords, I suspect that it will not surprise anyone in this House that I welcome the Government’s Statement to increase defence expenditure, although I might have taken a slightly different approach to where it comes from in the budget line. Can the Leader of the House tell us what the Government are doing to look at military expenditure in terms of working with the defence sector and recruitment, so that by the time we increase spending we have ensured that we have let the necessary contracts? Increasing the budget is one thing, but expanding our capabilities may not come about unless we get that right.

The noble Baroness is absolutely right: you cannot suddenly turn on a tap for defence expenditure, say it is however many billions of pounds more and then spend it the next day. Supply chains, research and development, and recruitment must be put in place. That is where the work of the strategic defence review that I mentioned will be vital. We totally concur with her important point.

My Lords, the comfortable world in which we lived up to two weeks ago has gone, and we now have to face some harsh realities. The stark truth is that we can no longer rely on a country that votes with Russia, North Korea and Iran in the United Nations for our defence or that of Europe. Does the Leader of the House agree that, while the Prime Minister’s announcement yesterday of an increase in defence spending is welcome, it is just a start? Does she also agree that we need to look radically at the entire remit of government spending to accommodate the very substantial increase in the defence budget, which, alas, is now necessary?

I am grateful to the noble Lord. He makes the point, which I also made in an earlier answer, that this is a generational shift: the world has changed, and we have to respond to that. The role that the Prime Minister has taken is one of leadership. It is important that we recognise that we want to maintain our alliance with the United States—we hope that that goes from strength to strength—and that we want to work within Europe in a leadership role. Some will try to lead us to make a false choice, but we will not do that. The noble Lord also made the point that this is a step in the right direction; it is not the end. The Government have committed to 3% following on from 2.5%, and that will be important. As a nation, we will have to come to terms with what our defence capability should be, how we fund that and how we maintain that moving forward. He is right to say that this is part of a process; it not the end of the story.

My Lords, the move to 3% is necessary and involves some hard choices, but does the Leader of the House agree that the defence and security of the British people is a three-legged stool that demands defence, diplomacy and development; and that, if you cut one leg, there is a danger of imbalance to the whole structure? Does she agree that there will be a need for smart procurement, there will be a need for innovative funding mechanisms and there will be a need for targeted interventions in development if we are to recognise the facts that the fastest-growing military force in Africa is the People’s Liberation Army and that the Russian Wagner Group has been deployed in not just Ukraine but Sudan, Mali and the Sahel and throughout Africa, and that needs to be recognised?

I thank my noble friend; his experience and powerful words are to be listened to. I made the point in an earlier answer that diplomacy, development and defence have to be balanced, and there is a rebalancing here, but we retain that commitment to return to spending 0.7% on ODA. But there is also the point, which my noble friend made, about how that money is spent and used to affect fundamentally those three areas of diplomacy, development and defence. That is really important, which is why issues such as procurement and the effectiveness of the money must be looked at, as must our relationships with other countries and working in partnership with other countries. As I have said and can only repeat, there is a generational shift today in how we look at these issues going forward.

My Lords, I declare my interest as a member of the Army Board. I welcome the rise to 2.5%; it goes some way to delivering the means that the noble Lord, Lord Robertson, needs to balance the ends and ways in the SDR. However, the aspiration to go to 3% after 2030 in the next Parliament is a tacit acceptance that it is simply not enough at the moment. It is no secret that, over the next two years, there will be significant financial pressures on defence, meaning that we will have to defer or cancel capabilities and defer capital programmes. This year, we have already seen announcements from the Government over the scrapping of HMS “Bulwark” and “Albion”, as well as the withdrawal of the Watchkeeper drone programme from the Army. Given that we have identified where this money is coming from—rightly or wrongly, it is coming from the aid budget—I simply ask: why are we waiting until 2027? Why are we not delivering it now?

The comments and response that I gave to the other Baroness Smith—the noble Baroness, Lady Smith of Newnham—highlights part of this issue: you cannot just turn on the tap and spend the money. You work up to how it is going to be spent, looking at supply chains and procurement. We will be very much informed by the strategic defence review in terms of how this money is spent.

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My Lords, we will hear from the noble Lord, Lord Walney, next and then the noble Baroness, Lady Helic.

My Lords, the Prime Minister’s recognition that the whole of the country needs to step up is critical, as is the recognition that that includes industry and universities. Can the Minister confirm that the Government will show greater leadership in challenging the idea that defence spending is unethical, when in fact it is a foundation of preserving our liberties? Will the Government do more to stop defence companies—and, indeed, the Armed Forces—being menaced off the campuses where they need to recruit the next generation of fighting men and women and employees in the forces?

The noble Lord’s words are wise ones and are taken on board entirely. I used to represent a constituency that had a defence industry, and I was proud to be the MP of that area. The simple fact that we are announcing an increase in defence spending, and the words the Prime Minister used, show that we are committed to the industry. There is an economic impact from this on the country as a whole, and we should recognise that. I assure the noble Lord that we will show that leadership, as required.

I welcome the Prime Minister’s Statement and his commitment to increasing defence spending. The clarity with which he has approached this is encouraging and is good for our long-term security. However, making sure that peace in Europe is not eroded again, as it has been eroded in Ukraine, is crucial. The western Balkans is currently in the worst possible security crisis since the end of the war in 1995. With that in mind, will the Government consider rejoining Operation Althea? At the moment, our deterrent is both weak and insufficient.

I thank the noble Baroness for her comments. She is absolutely right, and we accept that. We are currently working with key allies on that area. My noble friend may have something more to say on that at another point, but I entirely take the point she makes.

My Lords, my noble friend has rightly pointed out the need to ramp up supply chains, but that requires a sense of urgency on the part of both the Ministry of Defence and industry. Up to now, it does not appear that they have seized the opportunities or the necessity of this conflict. Are we going to see that major change? Will we see early results?

My noble friend makes a particular point. The certainty of the funding helps industry to meet the challenge. Previously, announcements have been made but there has not been the funding behind them, and that makes it more difficult for industry to make the plans they need to. He is right, and there are ongoing discussions about how industry and government will work together.

I of course welcome the increase in defence spending and the resolute support for Ukraine. However, I am disappointed that all this increase seems to have come from the overseas aid budget, which will, unfortunately, erode the UK’s soft power. The Minister has made it very clear that those cuts to overseas aid will not come in until 2027. Can she give the House a commitment that the previous Government’s desire to spend £11.6 billion on international climate finance between 2021 and 2026 will be delivered in full?

I do not have the exact details on that policy; I will write to the noble Lord about it. There will be a lot of ongoing work with the various government departments, particularly the FCDO, looking at how the finance is being spent and how we manage having to make those cuts. I will come back to the noble Lord on the precise point he makes.