Defence Committee

Tuesday 7th July 2026

(began 2 months, 1 week ago)

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10:01
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None Portrait Speaker 2
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I think the the delay has caused, um, a degree of confusion inside the Ministry of Defence. Uh, and, uh, considerable disturbance in the industry as well who had waited for, for this to take place. Uh, but that will be compounded by their disappointment at the, the actual plan itself when it came out and its inability to, uh, to project forward the, uh, the commitment to the 3.5% that the government has already said is, is its objective. So industry will undoubtedly have been affected, slowed down.

And in fact, some companies will have gone bust in the process as they waited for the degree of certainty that was that was required, in our view. We built this strategic defence review based on an assessment of ten years that that was our assessment at the time. For when a peer opponent might challenge the United Kingdom, that clearly has now been accelerated. Uh, and quite simply, we're running out of years. And the reality is that the challenge is now bigger, more serious, and earlier than we had anticipated.

And yet the defence investment plan itself doesn't come up to it. I would say, however, that that what is encouraging is that our strategic defence review remains the model. It remains the the outline plan for, uh, for the future and therefore doesn't need to be revised or redone. It's still there and it's still serious. And it is transformational. And if it's carried out properly, then both industry and people in the ministry itself will be given heart.
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None Portrait Speaker 3
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No, I totally reject it. We were asked two questions. One is, what do you have to do to fix UK defence for war in the 21st century?And that's the narrative of the SDL, which holds good in any setting. And as Lord Robertson has described, it's it's it's regarded as globally Pacesetting. The second question we were asked is, well, and what do you get for this money?And when we started out in July 24th, the financial profile that we had was set to.

Well, you'll get to 2.9% of GDP by 2930. And then it. Flat lines. This is an exercise in in more money. So as we worked through the consequences of that in partnership with the Mod, which is the only place you're going to get the information from, it became clear that profile meant a brilliant narrative and enormous cuts. And then in early 25, largely thanks to President Trump and his effect on NATO, that financial profile changed. So that over ten years, that narrative was broadly implementable.

There were going to be squeezes. So when we signed off the review, we were clear the narrative was the right one and accepted by government. The programme that delivered that narrative over ten years and a bit more, got you to a minimal place in ten years. And then we said, but we think the world will mean you have to go fast and you have to find more money sooner. And as Lord Robertson has described my goodness over the last year, that is that has been the case.

So we said this SDR, we think starts too late. Nothing happens for two years, then goes too slowly in this Parliament and then takes too long. And that remains the case today.
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None Portrait Speaker 2
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Uh.
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None Portrait Speaker 2
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Do you want to take.
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None Portrait Speaker 3
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So the primary purpose of the Strategic Defence review is to chart this course, which is common to all outcomes. This is how you transform defence for war in the 21st century. And that takes you to the sort of architecture I described, the operational challenge for the Mod remains that they have what they have today, which is the the rather thin set of inventories that result of the journey through the post-Cold war era. And so when their allies say, we need to be ready sooner by 2030, then of course they they need to fill in some holes and, uh.

That was always part of the, of the debate. But, but what we would, uh, we would have never have cancelled is let's not talk about transformation. Let's just fill in some holes. Nor would we have countenance. Let's just, you know, let's just do a digital kill and let's not have any ammunition that, that, that doesn't work. But this whole debate then turns on the fact that, uh, at the heart of the review and its implementation is the fact that the world, our opponents and our allies say you've.

Made commitments Atlantic Bastion strategic reserve core contribution to NATO air and space component component. You have an obligation in article three, you've made alliance commitments. Your Prime Minister says NATO could be attacked by 2030. And yet right now you're actually going backwards because you're not spending any new money, uh, sooner and and you've gone from major NATO spender to 12th in the order and ranked against your capability targets. You are 31 of 32 just above Iceland. That doesn't have armed forces.

So the the difficult debate is, is how do you implement the direction of travel of the SDR fast enough to deter our enemies and stay in place in step with our allies and be the the leading influence that we keep claiming to be. And that brings you back to the money, which is if you want to do that, find more money sooner, make different choices. That's it.
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None Portrait Speaker 3
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So in the execution of the SDR process every day, almost all day, every day, we were having a conversation about how the money that was available to us was fitted into the. So that's essentially the precursor to the dip. So when the dip process started, it was on the basis of the outcome of the of the defence. It was just going to become more granular and deal with actual money over time. And, and, and actually have to put money against specific programmes over time that you could, you could contract against.

So, um. The review was essentially concurrent with setting the parameters of the dip. And then what happened in the dip this, this last year was, and it was clear by, I think, August last summer that there was an enormous gap once they had looked at the figures again, added some new things in, had to bring some things forward because of the 2030. There was a gap. Let's say it was £24 billion over four years, a gap between what the review required to do, the 62 recommendations over time over the first four years, um, and the amount of money the government wanted to find in those first four years.

Now, since we knew no new money for the first two years, then only a dribble more, and the rest of this Parliament, that that wasn't a surprise. But but what it exposed was a really clear choice. If you want to implement this review and you said you do, then you're going to have to find more money sooner. If you can't find more money sooner. And it's not can't it's won't if you won't find more money sooner, then what would you like to cut from the review you just announced?And they went round that circle three times a week, every week between September and, and basically the announcement and that for me was just not good enough.
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None Portrait Speaker 3
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So so the first important point you raised there is, is the UK doesn't own the clock. Now on when we need it set by I think Russia and likely on the back of an outcome in in Ukraine, which is why people talk credibly about 2030 or or even sooner. So, um, that's an. Comfortable view in, in Whitehall where, uh, you may have to make different spending choices faster than you're comfortable with because your opponents have decided that's, you know, how the game is going to be played.

And that removes the leisure from the ten year programme. On the subject of integrated air missile defence, it's also alludes to this absolutely vital point that gets lost so often, which is the the Defence investment plan is the articulation of the SDI. It's the things that made the cut for the money available. Given the legacy holes in defence, there's at least another half of the iceberg which never made it into the dip because it wasn't even remotely affordable. So a 60 to £80 billion hole in defence infrastructure falling.

Down airfields, ports, housing reserve forces and cadets association. Most of that is not in the dip because it just couldn't get into the integrated air missile defence is the iconic thing that didn't make it into the into the review. So, um, there's about £1 billion in the in the dip for this. And what that buys is improved command and control. You'll know better that you're going to be hit by a missile. Some improvements for the Air Force ability to shoot down cruise missiles, some improvements to the type 45.

It has a better capability against ballistic missiles, but I think many people in the country assume there's a sort of iron Dome over London at least, and it's not even remotely there. The cost of an Iron Dome, even if you embrace the. The extraordinary technological change which some companies are producing in this. In. In producing low cost kills, whether it's directed energy weapons, dragonfire or or or cheaper missiles like Cambridge Aerospace, that kind of thing. Entry level, probably £80 billion over ten years.

Entry level I MD. Of my dreams probably £120 billion over ten years. And we got a billion because it sits in that bit of the iceberg that never got to be remotely affordable. And we shouldn't kid ourselves that that if we have an argument about the margins of the dip that were somehow fixing defence, it's just not true.
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None Portrait Speaker 7
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And finally.
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None Portrait Speaker 1
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Thank you so much.
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None Portrait Speaker 3
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I think it's a very complicated question because we are in uncharted waters of this transformation and how you fight in the digital age. I think it is absolutely wrong to try and model the UK armed forces on what you see in Ukraine or what you saw in Iran. Every war has its own features, its own geography, its own limitations. So I think the important place to focus is on the jobs, the UK armed forces actually have in the review from NATO. So the Atlantic Bastion and the Royal Navy's plan for the Atlantic Bastion to evolve quickly into a hybrid navy.

So crewed uncrewed, autonomous, above the water, under the water in the in in the sky is absolutely the right direction to travel. The the challenge is will they be in a good enough place not just to fight because they always will, but to endure?By the time the enemy sets the bar, which is a possible confrontation with Russia for the army, which is in by by far the worst shape of the three services, the thing that the current Sackur wants more than anything else from the UK is the Strategic Reserve Corps.

And he said this again and again, and that Corps currently exists of about two brigades with a mixed fleet. So the challenge of three tank doesn't exist yet. A couple of years. The artillery is coming a couple of years. So, uh, the direction of travel, they absolutely get this. Their problem is they're looking at the clock and they're looking at their programme and they don't meet. They are out of kilter. And, and the same for the scale endurance of the, of the Air Force.

So the prescription is good. It's the delivery versus the clock set by the opponents where the floor is.
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None Portrait Speaker 2
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At an early stage in our review, I said to our team, you know, remember that we have to convince the Treasury. More than anything else. We have to convince the Treasury that any extra money is going to be wisely and properly used. So put yourself in the mind of Treasury. And remember, we're a very senior Treasury official as part of our A review six years, we had six experts helping us. So we had a very senior Treasury official there.

And he was extremely useful. Uh, during, during the process, you know, so they think if you just give money to defence, it's wasted. It goes into programs that are over cost that are overelaborate. You know, they get added to the rarely delivered on time. And to do that. So we have to focus on that. And I appointed Sir Jeremy Quin, who had been one of the defence ministers in the last administration, defence procurement minister, one of the 16.

They had from 2010 to 24 um in order. To look at that and therefore the Strategic Defence Review looks at that about reforming acquisition to make sure that we don't have a situation like, you know, the type 23 frigates that are being built in Glasgow today, which were the backdrop for the launch of the SDR last June. You know, it's a simple, a basic, simple frigate that can be sold elsewhere. Uh, uncomplicated. But it took 20 years from the start of the drawing board to the delivery of the, of the, of the ships.

So we, we, we looked at that so that the strategic defence review and the acquisition side reforms, the whole way in which we do it, and the National Armaments Director giving advice to the to the Lords Committee was clear that that that was one of his priorities in order to solve the problem. And therefore undermine the sort of basic Treasury argument against giving money to defence.
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None Portrait Speaker 9
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Thank you.
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None Portrait Speaker 8
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Chair.
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None Portrait Speaker 8
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Um.
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None Portrait Speaker 10
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For example.
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None Portrait Speaker 10
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Which is fanciful. Right?
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None Portrait Speaker 8
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Thank you.
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None Portrait Speaker 2
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Yeah, I certainly agree with that. And I understand I was at a briefing yesterday and, uh, the, the National Resilience Plan is going to be published next Monday. So, you know, the home defence aspect, knitting together all of the, all of the different government departments is going to be articulated. And that's good news. That's really, really excellent because it requires every government department, you know, to, to do what it what it has to do. You know, I keep quoting to people.

I, I spoke at the Wigtown Book Festival. They last last November. Uh, Wigtown is in the southwest of Scotland, a small, small town with a big book festival. Uh, and I said to the audience, you know, they have you all got a wind up radio?Have you all got cash?Have you got your torches in every, in every room?Have you got, you know, canned food, uh, to do with that, you know, so, you know, sort of people went, went on at me later on about, oh, you, I've got my candles, you know, uh, to do with that.

But the key thing was that was on the Friday night, wild Friday night, by the Tuesday, there were still 25,000 houses in northern Scotland without power. So they went through the same experience that Spain and Portugal did last September. When for reasons that are still unknown, you know, their whole power supply went down and people found they couldn't tap cards to, to, to make money. The traffic lights went out, you know, and all sorts of dislocation took place in society as a whole. So that requires a whole of society approach to deal with it.

But the military aspects we deal with in the review and as and as Richard has said, there are very specific things that the military can and should be doing, but it's got to be part and parcel of an overall policy. And I'm hopeful that that next week the government is going to produce something that will be convincing.
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None Portrait Speaker 3
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So the defence is, is part of the articulation of how we return to a, a whole of society understanding about war in our time, that it's a longer something you just outsource to the uniformed military. So, uh, the first thing it must do is it, it must enable daily life to continue when the country is under assault, whether it's confrontational or conflict above the threshold of military conflict, which is military stuff. And more than that, below the threshold. So it must be possible for the government to drive daily life in a in conditions of crisis, where you can't allow everyone to make up their own mind, whether they cooperate or not.

The second thing is it must support mobilisation. It must it must enable the armed forces to go from a position that is today, relatively speaking, onto a war footing where you're drawing in reserves, you're dispersing people, you're moving equipment and people to the continent. You're beginning to take casualties, and then it must endure. Because if you look at the experience of Ukraine, this is year five now. And so, uh, this is not like sallying forth into Libya or even an Afghan campaign which is neatly bounded.

This is war where it could run for years. There's very likely mass casualties. There's very likely big damage to the, you know, the built environment and readiness and, um, and resilience is about endurance as much as getting started. So all of those things that was once common, I think during the Cold War, people understood that's how war was and it's completely evaporated. And now we're resurrecting it pretty much from scratch.
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None Portrait Speaker 2
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Well, speaking as a politician, I think the new Prime Minister is going to have to look at the the dip again. Um, because whoever the new Prime Minister is, they are going to be confronted by allies in NATO and especially by the American president, who is going to say, you know, this is the letter that John Healey sent in resignation. Um, so you, the new Secretary of State, you've got an extra allegedly an extra 1.5 million point, 0.02% more than John Healey got. Um, what is what is what is this story about?Where is the, where is the, the?The plan that takes you to 3% to 3.5% by, by, by in nine years time.

I think we, we keep talking about 2035 as if it's a long distance away. You know, the end of the decade is just three and a half years to go. And 20, 35 is nine years from now. So we're, we're supposed to get to that, that point. And when you actually talk about the figures, you know, to, to, to get to 3 to 3% would require an extra £21 billion a year on the defence budget, which is at the present moment, 70 billion um to.

Get to 3.5% requires 36 billion extra a year on the defence budget. So, you know, the the assumption by NATO and by the Americans is that we're going to have to plot our way, plan our way towards that. And that is where you the the dip is is unconvincing. And John Healey made it absolutely clear in his in his letter, um, that it falls well short of what is required for defence. And this country are a danger and a dangerous time and that, you know, that letter will be widely circulated throughout the people who are attending the NATO summit in Ankara tomorrow.
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None Portrait Speaker 3
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As a as a citizen taxpayer, I would want a new government to, to stop, um, just talking about the, um. Uh, the, the ways and resources around, you know, a bit more, a bit, a bit less. Open this door, don't open the SDR. Um, and we need to talk about the outcomes that we've got to get to. And if the outcome is that we, the UK as part of NATO, must be prepared to deter Russia from thinking it could attack European NATO at some point.

And let's say it's around 2030 because it's linked to an outcome in Ukraine. So if we've got 3 or 4 years to, to to be part of NATO credibly deterring Russia, which I think is pretty much what the Prime Minister has said, if you work back from that outcome, then the dip delivers a minimum outcome five years later than that. So the there's nothing wrong with the direction of travel. It's the pace and the volume that would have to step up, and that's going to include the stuff that's in the dip, but a bit shaky.

More of that. And then the stuff we'd have to look at that's not in the dip. And, and all of this is, is a very unfortunate and difficult discussion about how we didn't ask for it. Very unpalatable. It's going to cause us to take money out of things that we like. But this is the world we live in. And if a new government fails to accept that imperative, it's going to be confronting in three years time.

Potential strategic failure, a failure of deterrence, potential operational failure, which is you put forces in the field as part of NATO, and they lose. And you're going to be confronting a moral failure because you'll be sending the today's armed forces, who are all somebody's children, into the field in three years time, knowing that you decided not to prepare them properly. And as a result of that, more get killed and wounded than was necessary. And, um, that I. Think is is an underrated thought.
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None Portrait Speaker 8
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Thank you chair. Um, we mentioned just before about how some countries do better than us at informing citizens about the need to be resilient. And the committee was recently in Norway a couple of weeks ago. Um, so they do that much better in Norway and they actually mandate that everyone has to have seven days supply at home. So much what, similar to what you're saying, Lord Robertson but mandated and they reckon they have. I can't remember what the uptake they reckon they have maybe sort of 50, 60% less in cities, more rurally for kind of obvious reasons.

Um, one of the other things they do in Norway is pass a budget through Parliament for defence. And obviously when we travel as a committee amongst our allies, thinking about when we go to America, France, etc., they pass budgets through Parliament or Congress or National Assembly. Uh, and it makes an enormous difference because it's cross-party support. It is a demand signal for industry. It takes the kind of decision making pressure slightly away from the department. The government department.

Also in terms of that conversation on informing the public, it forces people's representatives to be debating publicly defence spending. Um whereas in our Parliament we do it on this committee and anyone outside of this committee does it by choice. Normally, because of having a constituency, um, relevant interest in a particular part of the supply chain and what have you. Um so a question for yourself, Lord Robertson, do you think we should do that in the UK?
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None Portrait Speaker 3
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So that's a very difficult question to answer because, um, it implies that within the current state of UK defence, there's much left to give. And the honest truth is that the current state of defence reflects that journey through the post-Cold war era, which means that everything that could have gone is gone. And in many cases, it's it's held together by by Sellotape and goodwill. And so, uh, when you ask the question, what would you what would you give up?Well, set aside the nuclear deterrent.

And that's 20, 20, 25% of the budget. And we've made three big commitments. The Atlantic Bastion, the Strategic Reserve Corps, and the contribution to NATO's Air and Space Command. And and we are not planning to make those contributions as viable as the Alliance need them to be in time in that, you know, we'll get there in ten years. We should be there. Um, in, in five. So, uh, I think trying to solve this problem by trying to skin things out is, is, is exhausted.

And it was exhausted in that debate that ran from August last year until the dip came out. We've done that. Now. The second thing, which is currently sterile, is trying to find more public money. It's not that from £1.4 trillion this year, there isn't enough money in the public sector. It's just that in the way our politics works, nobody is willing to make those hard choices to rebalance from something. I would say welfare into, uh, into defence.

So that's why we have found half the money that was needed to find the 28 billion in the dip. The conversation, which I think is much more productive but is a struggle to get going, is if you've exhausted the public sector and you can't cut anything else, now you have to engage the private sector. And there is some resistance to this philosophically, perhaps, but if you ask the city to find £50 billion over the next four years for things like infrastructure and logistics, they're ready to go and they're not, and they're ready to go.

Not in a repeat of the old PFI. For the taxpayer carrier, they're ready to go with new commercial vehicles, new ways of working, and they need some new rules with the Treasury. Our rules are the most restrictive in Europe. So I think the better answer to this question about how do we go faster, sooner right now, and I mean, before recess, is for the government, this new government, to engage with the city in the way governments have done for 2000 years when they need to pay for their wars.
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