Defence: 2.5% GDP Spending Commitment

15:35:00

(Urgent Question): To ask the Secretary of State for Defence if he will make a statement on his commitment to spend 2.5% of GDP on defence.

I congratulate the shadow Defence Secretary on securing the first Defence urgent question of the new Parliament. Previous Defence Secretaries answered just two urgent questions in the whole of the last five years. Although I cannot promise to answer every future UQ, I wanted to answer the hon. Gentleman’s first one today to underline just how seriously I take our Department’s responsibility to report to this House. The Government have a cast-iron commitment to spending 2.5% of GDP on defence. We promised it in our manifesto at the election, the Prime Minister promised it at NATO in Washington in July, and my right hon. Friend the Chancellor promised it in the Budget two weeks ago, as well as announcing a £3 billion boost for defence spending next year to start to fix the foundations for our armed forces. That, of course, is on top of £3 billion each year for Ukraine. I remind the House that the last time this country spent 2.5% of GDP on defence was in 2010, with the last Labour Government—a level not matched in any of the 14 Tory years since. Everyone agrees that defence spending must increase to match and deal with the threats we face. One of our very first acts as a Government was to launch the strategic defence review, which is working at pace to look at the threats we face, the capabilities we need and the resources we have available. It is not just about how much we spend, but about how we spend it. The Prime Minister said at NATO that our plan in the SDR will come first, and then we will set out the pathway to spending 2.5%; the Chief Secretary to the Treasury said yesterday that this will come in the spring. Today is Armistice Day. At the eleventh hour, I had the honour of laying a wreath at the Cenotaph. Today is a reminder of what is at stake in this new era of insecurity; a reminder that our dedicated servicemen and women, around the clock, around the world, work to keep us safe; and a reminder of the ultimate sacrifice that so many have made in the past so that we may live in freedom today. We will remember them.

Thank you for granting this urgent question, Mr Speaker, especially on Armistice Day. I am grateful for the Secretary of State’s response, but he keeps going back to 2010 when we spent 2.5%. That is true, but he says it without adding the fact that his Government had bankrupted the country. In fact, I asked the House of Commons Library about this. The Institute for Fiscal Studies has confirmed that if Labour had returned to government, it was planning cuts to the defence budget of 20% to 25%. But this question is about today. The threat picture is far graver than it has been for many generations, as the Chief of the Defence Staff confirmed at the weekend. As the Secretary of State says, the Labour party committed in its general election manifesto to a “path to spending 2.5 per cent of GDP on defence.” The Prime Minister said shortly after taking office that it was “cast iron”, which the Secretary of State has repeated today. With President Trump’s election victory, there will inevitably be a greater focus on what more European NATO members can do to boost Europe’s own defence, but yesterday the Chief Secretary to the Treasury and this morning the Secretary of State himself were unable to say whether the Government would deliver on 2.5% in the current Parliament. In addition, yesterday The Sunday Times reported that Defence Equipment and Support in Abbey Wood has effectively been instructed to avoid any new procurement at all for the rest of this financial year. Spending 2.5% is not an end in itself. The key reason that in April we set out a fully funded multi-year pathway to 2.5% was to enable the Ministry of Defence to procure, at pace and at scale, the munitions that we need to urgently replenish our stocks to warfighting levels. With the whole world wanting to buy more munitions, we cannot afford to delay any further. I have key questions for the Secretary of State, because at the same time we are having this debate, there are a whole load of new burdens coming for the MOD which it will have to cover. In which financial year does he expect the share of GDP spent on defence to start rising significantly, and will he guarantee to hit 2.5% in this Parliament—yes or no? Not including existing programmes, is it true that there is a freeze on new procurement of defence equipment and support for the rest of this financial year? Will the MOD be 100% compensated by the Treasury for higher employer national insurance contributions and for the cost of increasing continuity of education allowance, and will service families be 100% compensated for the extra VAT on school fees? Penultimately, on Armistice Day can the Secretary of State absolutely rule out surviving spouses of service personnel being taxed on death in service benefits? Finally, on the Chagos islands, in the Department’s written answer to me it refused to say how much the MOD will contribute to renting back our own military base, so this is a very simple question: the Secretary of State will not tell us how much it is going to cost, but does he know how much it is going to cost?

Please remember that when I grant urgent questions, the time each person has is limited. It is two minutes for the main Opposition party and one minute for the other Opposition party.

Fourteen years the Conservative Government had to increase defence spending to 2.5% of GDP, and there was not a plan or a pathway from the last Government, as the shadow Defence Secretary tries to claim. It was a political ploy that was announced four weeks before they called the general election. It was unfunded, and it was a con on the armed forces and on the British people, who gave their answer emphatically by sweeping away Tory MPs in many of the proudest military communities and constituencies across the country. On the shadow Defence Secretary’s accusations about a total spending freeze, I am putting in place a grip on the out-of-control spending that the last Government left. We are securing value for money, we are cutting waste and we are getting a grip on defence spending in a way his Government did not. We greatly value the continuity of education allowance and greatly recognise the role it plays in helping avoid disruption to the education of the children of serving personnel. In line with how the allowance operates, we will continue to pay up to 90% of private school fees following the VAT increase in January. By uprating the cap, we will take account of any increase in spending. On the Chagos islands, of course I know the details because I was heavily involved in the negotiations. This secures Britain’s military base, and it secures a military base for our US allies, which is why they welcomed it so strongly. I have said to the shadow Secretary of State and to the House that when it debates the treaty, this House will have the full information. Nobody knows better the defence inheritance that 14 years of Conservative government have left us for the past four months than the shadow Defence Secretary: he was a Defence Minister at the heart of the problems, with billion-pound black holes, service morale at record lows, and a crisis in the recruitment and retention of personnel. Never again must a Government leave our armed forces in a worse state than they found them, and this new Government will make this country more secure at home and strong abroad.

I call the Chair of the Select Committee.

We live in an increasingly dangerous and volatile world, with hundreds of thousands of people dying or being injured on our own continent in Ukraine, and wars and conflicts raging in the middle east, Africa and beyond, not to mention the increased nefarious activity in the grey zone. Without a shadow of a doubt, we are dealing with exceptional circumstances and we need to grasp the gravity of the situation. I have a great deal of time and respect for the Secretary of State because I know that he gets it, but do others in government understand the gravity of the situation, because we need clarity? We need a timetable so that not only our allies, but those in our defence community, know where we are heading.

Yes, they do. Everyone agrees that defence spending must increase, and it is increasing under this Government. It increased in the first Budget of this new Government by nearly £3 billion for next year. Alongside that is the cast-iron commitment that we are a Government who will set a path to spending 2.5% of GDP on defence.

I call the Lib Dem spokesperson.

We are deeply concerned about the impact of the US elections on Ukraine and Europe. President Trump is an unreliable partner and, within days of his election, US support to Ukraine is regrettably under question. Clearly the UK needs to urgently set out a path to spending 2.5% of GDP on defence. We need to lead in Europe. Does the Secretary of State agree that the previous Government’s legacy on our Army, which is the smallest since the Napoleonic era, is deeply regrettable? Will he commit to securing a UK-EU defence and security agreement, as was on the table while Theresa May was Prime Minister? Will the Government convene a summit on saving Ukraine, to begin the process of seizure of frozen Russian assets, so that the UK and our European allies can support Ukraine regardless of the path the US takes?

We do not need a summit to release the interest on the frozen assets—the corrupt Russian money—as we are doing that already. The Chancellor and I are working closely on that, and we have announced that, from early next year, £2.3 billion will be available for Ukraine for that purpose. I give the hon. Lady the assurance that we will pursue a UK-EU security pact, alongside the deep bilateral agreements we have already started to strike, including the one last month with Germany, which was the most comprehensive defence agreement this country has signed in many years. Finally, the hon. Lady is right—I have argued this before—that at a time of increasing global threats, European nations in NATO must do more of the heavy lifting. We must be prepared to spend more on defence, but we must also be prepared to work together to increase the level of deterrence we can offer to those who would do us harm.

Was President Trump not right in his first term, when he pushed NATO countries to increase defence spending? The numbers have gone from six countries meeting the 2% target back in 2021, up to 23 countries meeting the target now. Is this not serious, because if President Trump makes decisions on Ukraine in his second term, we might be faced with a choice either to accept those decisions or to step up and ensure Europe’s defence ourselves?

I welcome the fact that 23 NATO nations will hit the 2% spend this year. I regard that as a floor, not a ceiling. The UK, under Governments of both parties, has always spent well above and set the pace for other European countries. We will continue to do that, because European countries in NATO must take on more of the NATO leadership. We are determined that the UK will do that, which is why we have said that our approach to defence will be a NATO-first policy. We will, wherever we can, look to be first in NATO, so that we set the pace on the sort of transformation to the better equipped, better able and more lethal forces that our nations need to deter adversaries and to defend ourselves if required.

The Secretary of State is right that we used to spend a lot more than 2%: in the 1980s we spent between 4.5% and 5.1% of GDP on defence. Does he share my concern at what I heard on the radio this morning, when a Labour politician in another place was saying that he could see an outcome in Ukraine whereby Russia gets to keep the territory it has occupied, while Ukraine does not get any guarantee of joining NATO but merely some more security assurances? We know what happened last time with the security assurances previously given. Does the Secretary of State agree that, whether we spend 2.5% on defence now or in the near future, it is important that whoever we send to Washington does not capitulate in advance?

The right hon. Gentleman made the important point, implicitly in his question, that it is the Ukrainians who are fighting and the Ukrainians who will make the call about whether to talk and on what terms. Our task, as one of the leading supporters of Ukraine and its fight for sovereignty, freedom and its own future, is to support it and to step up our support for its fight, and then to step up our support, if necessary and whenever required, in any negotiations, as well as to play our part, as we have made the commitment to do, in providing any security guarantees for the longer term.

Russia has gone to war in Europe, starting in Ukraine. It was America and Britain that saved Europe in the last war; it looks like this will be the same. Europe simply must step up. What discussions has the Secretary of State had with Lloyd Austin about America’s role in the way forward?

To be quite honest with my hon. Friend, it is a little early to have discussions with America. It is less than a week since the presidential elections and the current Administration have more than two months to go. As she would expect, I am in detailed discussions with the current Administration and my counterpart there, in particular about how we together, as two of Ukraine’s leading allies, can step up our support over the couple of months ahead. In the future, I expect a President Trump-led Administration to recognise that it is in America’s interests, NATO’s interests and the interests of all countries that believe in the international rules-based order and a stable and secure peace that Putin does not prevail, because if large countries like Russia are able to redraw international boundaries by force, that sends a signal that undermines the security of all nations. If reports are right that President Trump has already spoken to President Putin and warned him against the escalation that we see from Russia in Ukraine, that is a good first step and early sign.

The right hon. Gentleman knows that I have the highest respect for him, even if we have occasionally clashed across the Floor. I ask him this simple question. In China today, one shipyard building naval vessels is out-building the whole of the United States’ naval capability—and it has many hundreds. Given that, and the threat from Russia, Iran and this totalitarian state axis, if Lord Robertson comes back and spells out exactly what I believe he will—that this is the biggest threat we have faced since the cold war—will the right hon. Gentleman not ask but tell the Prime Minister that the No. 1 responsibility is the defence of the realm, with 2.5% now?

The Prime Minister does not need me to tell him that the first duty of any Government and of this Government is to defend the country and keep our citizens safe. He will not need me for that because he commissioned the strategic defence review; my job is to oversee it successfully. He will not need any persuading of the arguments, assessments of threats and capability recommendations that that strategic defence review, externally led by Lord Robertson, is likely to produce.

My right hon. Friend is absolutely right not to give a scintilla of credibility to the idea that the Conservative party, having spent 14 years never reaching 2.5%, would do that if only it had one more chance. He is also right that what is important is not just identifying more money for defence spending but making sure that we start spending it better. Can he say any more about what he is doing to ensure that the huge wastage in defence procurement that we saw under the Conservatives is brought into hand under his stewardship?

I am almost tempted to encourage the shadow Defence Secretary to answer that question, because he was Minister for Defence Procurement until four months ago, so he is principally responsible, for instance, for the fact that only two of the 49 largest defence projects are on time and on budget. He failed to fix what the Public Accounts Committee of this House—an all-party Committee—termed the “broken” procurement system that has been failing our forces and failing British taxpayers. This is a deep task of reform. It is not a glamourous task, but I have made it one of my first priorities as Defence Secretary.

Is the UK able to provide an armoured division to NATO on an enduring basis?

The armed forces will always respond to the requirements placed on them. We will always seek to fulfil our NATO obligations. One reason why I conducted a NATO test in the first 100 days is that I was concerned that part of the failures of the last 14 years had led to our falling short. That is part of the inheritance that we take on as a new Government. My determination as Defence Secretary is that we make our forces fitter to fight and better able to deter and to play a leading part in NATO, as it steps up our level of deterrence and defence across the 32 nations.

Today, on Armistice Day, we honour those who have served, those who have fought and those who have made the ultimate sacrifice to protect the freedoms we enjoy. Does the Secretary of State agree that today and every day we must remember everything that our armed forces are doing to keep us safe? Will he come to my constituency to meet Sight Scotland Veterans, an incredible charity that provides amazing support to all our visually impaired veterans?

At the risk of upsetting my diary secretary, I welcome the opportunity to visit my hon. Friend’s constituency and her local veterans group. She is right that, today of all days, we remember not just those who gave their lives for the way of life we enjoy today but the serving personnel—the men and women in our armed forces around the world. We currently have 10,000 personnel on operations in 50 different countries around the world. This is a reminder of their work day in, day out to keep us all safe.

Let me assure the Secretary of State that those of us who have followed the defence debate over the last 10, 20 or even 30 years know that he takes these matters extremely seriously and understands the scale of the challenge that we face. In that vein, I encourage him to start telling the truth: that we will have to spend far more than 2.5% of GDP on defence within quite a short number of years. A former Chief of the General Staff has warned that this country might be directly at war within the lifetime of this Parliament. May I suggest that the Secretary of State use his friends throughout this House to influence both his Government and the Treasury influences on the Conservative side, because we are going to have to bust a gut for a major rearmament programme that we have not seen in this country since the 1930s?

The hon. Gentleman has been consistent in his arguments, and I welcome his contribution. The Treasury will have noted it, and will probably take it as an early representation for the next Budget. In the meantime, I will ensure that the strategic defence review starts with the threats that we face: war in Europe, conflict in the middle east and growing threats globally, as well as Russian aggression more widely beyond Ukraine. We will ensure that we are able to match the capabilities that we develop with the threats that we face, and we will do so within the resources that we have available.

My hon. Friend the Member for Chesterfield (Mr Perkins) made the important point that the new Government inherited £167 billion-worth of projects, none of which were rated green by the National Audit Office. Does the Secretary of State agree that more money is one part of the equation, but spending it well is the other part?

Indeed; that is one reason why, early doors in Washington, the Prime Minister not only reaffirmed our iron-clad commitment to increasing defence spending to 2.5% but said that the strategic defence review comes first, as a pathway to 2.5%. That is exactly so that we can ensure that we increase what we spend, but also spend it better.

In 2023, I asked the Secretary of State’s colleague, the right hon. Member for Houghton and Sunderland South (Bridget Phillipson), who is now the Education Secretary, how Labour’s plans for VAT on school fees would impact the continuity of education allowance for forces families. I was told that I “need not be concerned about what we are discussing today.”—[Official Report, 11 January 2023; Vol. 725, c. 570.] It is two years on and VAT on school fees goes live in January, but details of the rates of continuity of education allowance still have not been articulated to the forces families in my constituency. As the proud MP for a military constituency, I can tell the Secretary of State that I am concerned and my constituents are concerned. What is the plan to better communicate with them?

I am sorry that our confirmation of the steps we are taking from January has not reached the hon. Lady. I will ensure that they are. There will be an uprating in the continuity of education allowance, which will ensure that our armed forces who take advantage of the allowance will be able to get up to 90% of the school fees they have to pay covered by that allowance, and that that takes into account any rise in school fees as a result of the VAT being levied.

The shadow Secretary of State referenced his so-called plan for defence spending back in April this year, a plan that the Institute for Government said did “not add up” and was “fictitious”. Does my right hon. Friend the Secretary of State agree that under this Labour Government we will never make funding commitments to our armed forces unless they are fully funded?

I do. My hon. Friend is right. The Institute for Fiscal Studies described that so-called plan, the election pitch four weeks before the Conservatives called the election, as “misleading” and an empty promise. I give the House the undertaking that the plans we put in place will be openly discussed in this House. We will ensure that we can match the resources available to our plans.

Defence professionals across Whitehall will have their heads in their hands at this Government’s commitment to 2.5% at some point and when fiscal conditions permit. To fail to commit on defence investment with the multiple security threats facing us, from the Ukraine war to the middle east and a plethora of global cyber-threats, is strategically illiterate. Those threats will not wait for the Chancellor to get a grip, so what urgent steps will the Secretary of State take with the Chancellor to ensure at least the 2.5% promised by the Labour party on defence is spent when the threat assessment demands it, which is now, and not when the Chancellor feels it to be convenient?

Mr Speaker, I am going to take what I can from the hon. Gentleman, which is an SNP welcome and an urging for an increase in defence spending. That will happen under a Labour Government. The Scottish workforce, the Scottish military and the Scottish-based military will play an important part in the defence of this country in the future.

We have heard some chutzpah from the shadow Secretary of State for Defence today. The Conservatives had 14 years to get to 2.5%, yet they demand it from us now. I am very pleased that the Secretary of State has set out how we will get towards 2.5% after our strategic defence review, but in the meantime we have to clear up the mess the previous Government left behind. Can he assure the House that he and his colleagues are working to clear up the waste and mismanagement they found when they came to the Ministry of Defence?

I can indeed. It was one of my predecessors as Defence Secretary who admitted to this House that under 14 years of the previous Government the armed forces had been “hollowed out and underfunded”. That is no surprise when we look at the record of the Conservative Government when they came into office in 2010, compared with the record of this Government. Our first Budget has a £3 billion boost to defence. Their first Budget had a £2 billion real-terms cut. Our manifesto had a commitment to increase defence spending to 2.5%. Their first five years in government saw an 18% real cut in defence spending, which laid the foundations for the degradation and the poor state of our armed forces, and the poor state of the finances that we have now inherited.

The last Government extended to state school pupils the undoubted advantage of the combined cadet forces, which had been the almost exclusive prerogative of private school students. Why, then—

Order. May I ask the right hon. Gentleman to look at me while he is asking his question?

Why, then, Mr Speaker, did this Government decide, last week of all weeks, to defund combined cadet forces and thus remove the advantages that state school pupils are now enjoying as a result of decisions taken by the last Government?

I simply do not recognise the right hon. Gentleman’s description of any decisions that we have taken, and it would run contrary to what he and I agree is the value of combined cadet forces. Most of us, in our constituencies, have contact and working relations with good cadet forces that give young people opportunities that they simply would not have at school or in any other walk of life. They have an important part to play in the future of individuals, and also in the wider understanding of our armed forces.

I welcome the Secretary of State’s recent announcement of the Armed Forces Commissioner Bill—a promise made and a promise being kept—but does he agree that this is just one part of the puzzle when it comes to showing that we can support our troops as they work to keep us safe?

Indeed I do. My hon. Friend is a strong champion in his constituency in Scotland for the armed forces and veterans. I greatly valued the visit that I was able to make with him before the election to talk to veterans in his constituency and talk about our plans to increase support in respect of employment, mental health and housing for the future.

One of the big achievements of the last 14 years was the delivery of the aircraft carriers, both of which are stationed in Portsmouth, near my constituency. However, it remains clear that they are underpowered. We need more Type 45s, more Type 26s and more Type 31s. If the Government are serious about the 2.5%, when will they set out their plan to invest in our Royal Navy and, in particular, our aircraft carriers, so that our carrier strike group can provide a world-class capability?

The aircraft carriers constitute an important defence programme. We are considering the threats that we face and the future capabilities that we need as part of the strategic defence review, which will report in the spring, and we will follow that within our clear path and our commitment to spending 2.5% of GDP on defence, just as the Chief Secretary to the Treasury told the media yesterday.

Today is Armistice Day, which provides an important moment in which to pause and remember the huge amount that our armed forces have done to keep us safe. On this day, does the Secretary of State agree that we must not only set out our ironclad commitment to 2.5%, but support the armed forces, their families and our veterans?

Indeed. The forces families who support those who put on the uniform are too often overlooked, which is one reason why we introduced legislation last week for an independent armed forces commissioner, as we promised to do at the election. The holder of this post will report directly to Parliament, will have access to personnel, sites and information, and will be able to look into the concerns of not just those who serve but the families who support them, in order to improve service life for the future.

May I commend to the Secretary of State the role of Ploughshare, which is used to deal with the increasing commercialisation of opportunities at the Defence Science and Technology Laboratory at Porton Down, in my constituency? In the context of the Ministry’s holistic review, which is now under way, will he undertake to ensure that that organisation is not held back from extending its opportunities to commercialise assets emerging from MOD research?

One of the weaknesses in our system is that the often-excellent innovation, research and development does not get developed, invested in or commercialised, so potentially brilliant small companies do not grow and expand. I have to say to the right hon. Gentleman that I am not familiar with Planshare—[Interruption.] Ploughshare. I did not even hear the name correctly. If the right hon. Gentleman would like to write to me with some details, I would welcome his letter and certainly have a look.

Like others on this side of the House, I welcome the increase in defence spending that was announced in the Budget, after years of Tory cuts to our armed forces. Does the Secretary of State agree that we need to increase defence spending in response to emerging threats around the world, from Ukraine to the middle east and Asia-Pacific, and that the figure of 2.5% should be kept under review in the light of changing events around the world?

Yes, I do. My hon. Friend makes the important point that the starting point for any defence planning must be the threats that we face. At the heart of any defence plans must be the people who serve and on whom we depend. I make that heartfelt point particularly forcefully today, on Armistice Day.

In 2021, when Boris Johnson was Prime Minister, defence spending in the UK was 2.3% of GDP. In 2022, following Russia’s full-scale invasion of Ukraine, defence spending was 2.3% of GDP. Now that an isolationist President-elect is about to go into the White House, defence spending is 2.3% of GDP. When will defence spending rise beyond 2.3% of GDP?

I am not sure that I heard the hon. Gentleman welcome the fact that this Government have made a commitment to set a path to increase defence spending to 2.5% of GDP—a level that we have not had in this country for the last 14 years. Everyone agrees that an increase in defence spending is needed, and it is needed in order to deal with precisely the increasing threats that he cites.

I welcome the Opposition’s new-found enthusiasm for meeting the 2.5% defence spending target, especially given that they were not able to meet it even once in 14 years. I gently remind them that the last party in decades to meet the target was the Labour party. Does the Secretary of State agree that not only do we need to increase our spending to 2.5% of GDP, but we must remain steadfast in our support for the people of Ukraine to protect the entire continent of Europe?

I do agree. I pay tribute to the last Government for ensuring that the UK led in providing support for Ukraine. As a new Government, we have been determined to continue that over the last four months. We have stepped up the military aid that we are supplying to Ukraine. We have sped up that support in a way that President Zelensky now cites as a model for other countries, and we are now spending more on military aid to Ukraine than ever before—£3 billion this year, next year and every year for as long as it takes, plus the £2.3 billion that we will be able to release from the frozen assets seized from the corrupt regime of Putin’s Russia.

I would urge the Secretary of State to exercise a little bit of caution when referring to defence spending under the last Labour Government. As someone who served in Iraq and Afghanistan, and who used some of the kit and equipment that was issued then, I know that there were some serious concerns at the time, particularly around the Snatch Land Rovers, for example. I spent a lot of time driving around Basra in one of those, and a lot of people lost their lives in those vehicles, so I would exercise a little caution and restraint. My question is on a different topic: the CEA. How much will meeting the additional cost of VAT cost the MOD from its own budget?

We will publish the financial figures for the CEA in due course and in the normal way. On the hon. Gentleman’s previous point, I am very conscious of what he and those who served in Afghanistan and Iraq faced. I am very conscious that at times during the last Labour Government, as with any Government, the kit and equipment was lacking. That is why we tried to replace the vehicles, using urgent operational requirements at the time. Although we inevitably fell short in some areas, we were spending 2.5% of GDP on defence in 2010, when we were last in government, and the strength of the full-time British Army was over 100,000 soldiers.

I associate myself with the comments of hon. and right hon. Members about Armistice Day. During the previous Government, the size of our armed forces shrank from 192,000 to 138,000—a 28% decrease. Does my right hon. Friend agree that it will take this Labour Government to put our defences back on the firm footing that we need in an increasingly dangerous world after many years of underinvestment?

My hon. Friend is right. He is pointing to armed forces numbers and to the heart of a deep, long-running problem: the crisis in recruitment and retention in our forces. Recruitment targets were set every year for 14 years and missed every year for 14 years. We are taking steps to start to deal with this, including through the largest pay rise for our armed forces for over 20 years, so that I can now stand here as the first Defence Secretary to be able to say that all those in uniform are now being paid at least the national living wage. The introduction of an independent armed forces commissioner to improve service life will start to reset the nation’s contract with those who serve and the families that support them.

Last year, global arms expenditure reached $2.4 trillion, the highest level since the end of the cold war. UK arms expenditure went up, and it will no doubt go up a lot more because of the statement that the Secretary of State has made today. He rightly mentioned the conflict in Ukraine and the conflict in Gaza, and I think he could have mentioned Sudan as well. What actions are he and his Government taking to try to bring about a cessation of those conflicts and of global tension to allow defence expenditure to be reduced globally so that some of that money can be used to deal with the serious environmental and inequality issues that face this planet?

We cannot wish away the threats, and we cannot wish away the conflicts, which is why it behoves any Government to ensure that we have the armed forces that are capable and equipped to deter those who would do us harm. On the question of conflicts, our support for Ukraine is steadfast. That conflict could be ended today if Putin withdrew from his illegal invasion of that sovereign country. On the middle east, we have argued and worked—in opposition and now in government—for a ceasefire in Gaza that would allow the immediate release of all hostages and the necessary flooding of humanitarian aid to Palestinian civilians. That is a first step towards a political process that must be directed towards a two-state solution, which is the only guarantee of long-term peace and security in that region.

I had the privilege of starting my day in Shefford, just up the road from the Chicksands base in my constituency, marking Armistice Day with local veterans and the wider community. I welcome today’s commitment to ensure that we finally have a credible plan to get to spending 2.5% of GDP on defence, but as the Secretary of State has set out, it is about not just what we spend but how we spend it. The last Government spent millions on armed forces accommodation but all too often left the forces in my constituency in shocking situations. Will this Government be different in ensuring that our armed services can finally access the quality of accommodation they deserve on local bases?

My hon. Friend is right. Time and again surveys of armed forces personnel show that poor-quality housing, which would be intolerable in civilian life, is cited as a reason for low morale and an intention to leave the forces early. This is an underlying problem that we will fix. We will not be able to do that overnight but we are determined that we will provide the accommodation and housing that our heroes in uniform have a right to expect.

I completely agree with the Defence Secretary that defence spending must increase to meet the threats we face. Given that the threats are visible and increasing, I found myself nodding in agreement with Admiral Lord West’s recent Guardian article, in which he said we should be bold and move directly to spending 3% of GDP on defence. Does the Defence Secretary agree with his revered Labour colleague’s assertion? If not, why not?

In our first Budget, we increased next year’s defence spending by nearly £3 billion. We have a cast-iron commitment to increasing defence spending to 2.5% of GDP—a level that, over the past 14 years, Conservative Governments simply never matched.

The Secretary of State rightly refers to R&D spending and small firms, yet small firms in my constituency tell me that spending has dried up. Can he assure me that this is just a blip and that normal flow will resume as soon as possible?

I think the shadow Secretary of State will agree that one of the necessary reforms to our procurement system, especially in an era in which innovation and technological development will be at an increasing premium, is to do much more to support small and innovative firms, perhaps including some in the hon. Gentleman’s constituency. We have to reform our procurement system to ensure that happens, and we will.

I thank the Secretary of State for his answers to all the questions. I seek an assurance that our spending will focus not only on cyber-security, which is obviously essential, but on recruitment and retention. That spending must take account of the fact that, in April 2024, the Army fell below its target size for the first time since it was set, meaning that all three service branches are currently below target—the Army by 1%, the Royal Navy and the Royal Marines by 5%, and the RAF by 10%. Overall, the UK armed forces were 5,440 personnel, or 1%, below target. We need an assurance on recruitment.

The hon. Gentleman sets out some of the details and dimensions of the crisis we face in recruitment and retention. We will start to turn that around, but we will not be able to do so straightaway. We have made a start with proper, fully funded pay awards for our armed forces this year. We are also making a start with new legislation to set up an armed forces commissioner to improve service life. We will take further steps to renew the nation’s contract on the support we can offer to those who serve and the families who support them.