Defence Investment Plan
What fiscal steps she is taking to support the defence investment plan.
I am pleased to update the House that I met the Secretary of State for Defence and the Chief of the Defence Staff yesterday to talk through the defence investment plan. The Ministry of Defence is producing a defence investment plan that will meet the scale of the challenges and meet the moment with increased readiness. I am confident that the new defence investment plan will be published before the NATO Ankara summit. It will involve more money spent more effectively and will meet the scale of the challenges facing our country.
The former Defence Secretary has blown apart the defence investment plan, revealing that the Treasury was prepared to offer only a pitiful increase in defence spending—just 0.08% by 2030—despite growing threats across the world. At the same time, the Treasury continues to fork out billions for welfare and the net zero agenda. Innovative small and medium sized enterprises in defence are effectively locked out of MOD contracts and denied the opportunity to scale their capabilities. As the Chief of the Defence Staff put it, “the price of peace is increasing”.
Will the Chancellor commit this morning to filling the £28 billion gap in defence investment by 2030 to secure our position on the world stage, or will she stand in the way of the delivery of the DIP that we need?
As I just said, the DIP will be published before the summit. It will involve more money spent more effectively, and it will meet the scale of the challenges we face. Frankly, I will take no lectures from the Conservatives, who left our armed forces, in the words of their former Defence Secretary, “hollowed out”. Our forces hit rock bottom for pay, morale and numbers. The Tories do not like to mention the £12 billion of cuts that they made to defence in their first five years in office. We are turning that around with the biggest uplift in defence spending since the end of the cold war. This Labour Government will continue to invest in defence, with contracts awarded to firms here in Britain to keep our country safe.
I call the Chair of the Treasury Committee.
My right hon. Friend is right to highlight those challenges. Throughout the 10-year equipment plan, there was always a £14 billion deficit that never seemed to go away. It is great that we are seeing more investment, but could the Chancellor update the House on what conversations she or her Ministers are having with Governments in Europe and with Canada about the Defence, Security and Resilience Bank and the multilateral defence mechanism for funding and procuring defence across NATO?
I thank my hon. Friend for her question. As Members will know, this Government are working on plans with our NATO allies for a multilateral defence mechanism. We have already signed a treaty agreement with Finland and the Netherlands, and we are working closely with Scandinavian, Baltic and eastern European countries. The multilateral defence mechanism will enable us to procure jointly and stockpile equipment off the balance sheet, ensuring better value for money for taxpayers and enabling innovative forms of finance to fund our defence. We are also working closely with Canada on the multilateral defence mechanism and the Defence, Security and Resilience Bank, which lends to smaller businesses in the supply chain, so that we have one model to help us better fund defence in our country and across Europe.
I call the shadow Minister.
It is good that the Chancellor has had those meetings, but perhaps they have come too late, because when the former Defence Secretary resigned, he said that the Treasury was “unwilling” to provide the resources needed to defend the country against rising threats. The Chancellor has said that national security always comes first, so why this dereliction of duty? Why is she failing to tackle the ever expanding welfare budget and blocking the defence investment plan from getting the funding needed to meet the threats that we face?
The hon. Gentleman is literally sitting two places away from the right hon. Member for Central Devon (Sir Mel Stride)—the former welfare Secretary who presided over a record increase in welfare spending.
We have commissioned Alan Milburn to do a review—the first part of which was published recently—to address the problem that we inherited of young people not in employment, education or training and get young people back into work. I am proud to be the Chancellor who has overseen the biggest uplift in defence spending since the end of the cold war. We funded that through our difficult decision to reduce overseas development assistance, but that was the right choice. When we set out the defence investment plan ahead of the Ankara NATO summit, the whole House will see the further changes we are making in order to better support defence in an increasingly unstable world.