Defence Investment Plan

Lord Fox Excerpts

Wednesday 1st July 2026 Lords Chamber

[Baroness Goldie (Con)]

My Lords, I thank the Minister for both the briefing and prior sight of the defence investment plan, which he provided to me and my colleague, the noble Earl, Lord Minto, yesterday. I doubt any plan was so dogged by delay and preceded by such drama as this one, but that doleful prelude was eclipsed by the gloom and scepticism that engulfed the plan when it became public. To quote my honourable friend in the other place, Mr James Cartlidge, it is “too little, too late”.

The threat we face is now. This plan, lacking in significant detail, is for the next four years. It was intended to deliver the recommendations in the SDR. It does not. It should have laid out a path to the 3% of GDP needed before the end of this Parliament, never mind during the next one. It does not. As for a path to NATO’s target of 3.5% of GDP by 2035, that apparently remains in the mists of the Prime Minister’s imagination: undiscernible and shortly to disappear.

The Prime Minister criticises the previous Government for not spending enough, but I point out to your Lordships that my party responded to the threat as we understood it then, in the wake of a searing economic challenge inherited from a Labour Government in 2010. However, despite austerity, we kept the RAF Lossiemouth air base open; ordered the vital Poseidon planes that operate from there; ordered eight Type 26 frigates and five Type 31 frigates, which are being built now; launched the Global Combat Air Programme to produce the next-generation fighter; and commissioned the Dreadnought programme to renew our nuclear deterrent. I am not going to speculate on Mr Burnham’s Harry Potter powers to wave a magic wand to fix this deficient defence investment plan. Given his projected political strategy to date, fixing defence is not on any wish list I have seen. However, I know that none of this is the Minister’s making. He is here to answer questions, which I know he will do with his customary loyalty, integrity and courtesy.

I will start with the Secretary of State’s foreword to the plan. If we strip out the roseate language, £298 billion is to be spent over the next four years. Some £283 billion of that is not new money; it is simply what is required to keep the doors open, pay the people turning up and ensure that the day-to-day bills are paid. The crux question is: how much is needed on top of that? The Chief of the Defence Staff, Sir Richard Knighton, says that £28 billion of additional money is needed over the next four years to do what must be done to keep us safe. My party is prepared to answer that call and fund it by reinstating the two-child benefit cap, reallocating up to £50 billion currently being spent on welfare and costly net-zero projects, and scrapping Labour’s catastrophic Chagos deal. This Government are not prepared to answer that call and will short-change defence by the £13 billion that they were never going to provide. That is completely unacceptable.

The former Secretary of State, John Healey, has said that this plan leaves the country “less safe”. The authors of the strategic defence review have said that the funding package is “not enough”. What will it take for the Government to listen to the service chiefs, the retired senior officers, and indeed members of their own party, and find the money that they all say is needed to keep us safe?

Even the inadequate £15 billion that the Government are going to provide immediately starts to fall apart under scrutiny. We know from the Chancellor that £4.7 billion is not there. According to the accompanying funding explainer, it is to be allocated at the Autumn Budget, presumably by a new Prime Minister and a new and as yet unknown Chancellor.

If this were not bad enough, page 73 of the Defence Investment Plan is revealing. It discloses that £10.7 billion of the £15 billion is to come from “defence efficiencies” over four years. So, as we speak, that money is not there either. This is accountancy smoke and mirrors. On the defence efficiencies, £1.1 billion is to come from “reform and service redesign”—so what reform, what redesign and what details can the Minister provide? Some £3.3 billion is to come through “workforce and resourcing”. What does that mean and what detail is available? Some £2 billion is to come through “infrastructure”. What infrastructure? How is that money to be provided? Some £0.2 billion is to come through “digital”—how? Some £3.7 billion is to come through “acquisition and supply chain”. How has that figure been arrived at, and what underpins that estimate? The more alert among your Lordships will have noticed that that totals £10.3 billion, not the £10.7 billion that is at the head of the defence reform efficiencies. So we have another £400 million whistling into the blue yonder. Separately, the plan also states that £1.1 billion will come from asset sales, so what assets will the Government flog off?

Unless the questions I have posed can be answered, this plan is meaningless. NATO, the MoD, politicians and the public need clarity about how much money is being given, when it is coming and how it is being provided. Smoke and mirrors and Treasury trickery do not cut it.

[Lord Fox (LD)]

My Lords, this is clearly a very delayed and extremely underfunded plan. As we have heard, at £15 billion it falls well short of the £28 billion requested by the defence chief to keep our country secure. But we know that it actually falls even shorter than that, as nearly £5 billion is unfunded and some £11 billion or more relies on undetermined efficiency savings. So, after months of paralysis, resignations and Cabinet chaos, the Government have short-changed the Armed Forces.

However, we should remember that it was the Conservatives who hollowed out our military, leaving the Army and Navy smaller than they had been for hundreds of years. The Tories failed to look after service personnel properly, through a lack of suitable housing and poor mental health support—that was unforgivable.

This Statement is a long way from solving these vital issues and many others. It is a political choice made by Sir Keir Starmer and the Treasury, and it leaves us less safe. Furthermore, it undermines our reputation as a leader in NATO. Last year, all NATO countries pledged substantially to increase investment so that we all hit 3.5% of GDP by 2035. But, even if the missing money is found, the share of GDP that we spend on defence by the end of the decade will be only 2.7%. In media interviews today, the Procurement Minister, Luke Pollard, said that the spending review next year will describe a pathway to 3.5%. That review will need to find an extra £25 billion per year to get to our stated target. Given where we are starting from, this is hardly credible.

This lack of credibility is not just a domestic phenomenon. When I attend NATO Parliamentary Assembly meetings, I can sense the reputation of the UK falling back. This is more than just worrying. So I will suggest some ways to increase investment and leverage what resources we have more effectively. The Liberal Democrats’ plan for defence bonds would provide an additional £20 billion at least, funnelling in private sector investment. This is not pie in the sky. Poland’s armed forces support fund, for example, was established in 2022, with the main source of funds being issuing bonds. For context, last year Poland spent 4.7% of its GDP on defence.

There are better ways of leveraging our existing defence spend. The UK could take part in the nascent defence, security and resilience bank. This ticks a number of important boxes: it would be multilateral; it would work with a greater number of allies; it would help project financing to span election cycles; and it would cost-effectively pull in private finance, multiplying our state investment by many times. The Canadian Prime Minister, Mark Carney, is a major proponent of this initiative. He met with Sir Keir’s envoy, Gordon Brown, last month to discuss it but, disappointingly, there seems to have been no progress.

The Government could also take bolder steps towards working with our European allies. Last month, the Lib Dems announced a plan for a UK-EU defence pact, including our intention to join Security Action for Europe—the SAFE programme. Andy Burnham is quoted as having said favourable things about both defence bonds and the DSR bank. He has also been historically in favour of closer relations with the EU. Does the Minister agree that the new Burnham-led Government should issue defence bonds, work with Canada to deliver the DSR and join the SAFE initiative in Europe?

There are also ways of making our spend on big ticket items go a bit further. For example, GCAP currently involves the UK, Japan and Italy. Canada, Saudi and possibly Germany have been mooted as additional partners. Can the Minister confirm that, through adding to the GCAP group, money could be diverted to other UK defence needs?

Much has been made of the headline spend of £5 billion for advanced uncrewed systems over the rest of this Parliament. I am sure this is welcome, as these systems are at the heart of modern warfare. However, to put this into context, the three-year £5 billion investment is only a tiny percentage of the plan’s £298 billion spend over four years.

We welcome the commitment to establish six new energetics factories by 2030. However, the nine-month delay in publishing this spending plan has frozen procurement and put many SMEs in peril. Now that we have a funding plan, how will the Government change the procurement process to give SMEs the certainty to invest and the cash flow to thrive?

Finally, last year’s strategic defence review rightly stated that national resilience cannot be bought with military equipment alone. It stressed the need for a comprehensive national conversation to shift our mindset and prepare the wider British public, local government and business for the hybrid, cyber and non-traditional threats that we already face. This is a whole of society challenge that spans far beyond the MoD, so what concrete progress is the Minister making with his government colleagues to initiate this national conversation?

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

I thank the noble Lord, Lord Fox, and the noble Baroness, Lady Goldie, for their contributions and important questions.

I will start by dealing with the question of spending, which goes to the heart of what both noble Lords were saying. Let me put on record some of the things that were said about the defence investment plan. I will make only one political point—that there will be a 27% real-terms increase in defence spending between 2023-24 and 2029-30—because all of us have at heart the security and defence of our nation and how best we should do this.

As both noble Lords and the House will know, the Government have set out plans for an agreed £15 billion increase in spending. This is outside the normal spending review process. That is not necessarily the way that Governments normally do things, but I gently remind the noble Baroness that it is not unheard of for Governments to take action outside the new spending process and to refer to the next Budget as the place where the detail will be confirmed. Indeed, the previous Government announced their five-year NHS plan in 2018 outside the Budget and the spending review. What did they say when challenged about it? I think the noble Baroness and the noble Lord, Lord Fox, will know: “We will be able to explain exactly where every penny is coming from, but we will do it in the next Budget”.

I will also refer to when the Conservatives published the integrated defence review in 2020. What did they do? They said that they would set out the funding at the next spending review. So, let us drop the idea that this is an abnormal process. It is important that the Government have taken the decision outside the spending the review to reprioritise and reallocate spending between spending reviews.

We have said that we will lay out the process for the 3% in the next Parliament. We will come back to the 3% and, indeed, the 3.5% at the next spending review, which will be next year. That is not an abnormal process; that process of taking action outside the spending review is one that Governments have taken over the past few Parliaments. That is an important point to make. Indeed, the foreword by the Secretary of State refers to the commitment until 2035 as a “promise”. It is laid out in there. He and I would expect all of us to be held to account with respect to that.

The noble Baroness, Lady Goldie, and the noble Lord, Lord Fox, mentioned defence savings. I will be clear about the efficiencies, or the savings—whatever we want to call it. The allegation seems to be that the efficiencies are to be taken out of the spending power that the department would have. To be clear, the increase in our spending power is not conditional on these efficiency savings. That is a really important statement for us to make. Who would expect the Treasury, under any political party, not to require a department to have some sort of target for tackling fraud? Who would not see the use of increased efficiency through the use of AI or better technology as bringing about savings that could be reinvested? Who would not expect the Treasury to say, “We would wish you to find efficiencies through an increased reliance on consultancy”? Who would not expect efficiencies to be dealt with? Many noble Lords opposite have called on me in the past to find a way to make sure that we have the most efficient use of the workforce that we have.

The noble Lord, Lord Fox, asked me about housing. Over the next 10 years, the Government, having spent nearly £6 billion to bring Annington Homes back into public ownership, will spend nearly £9 billion over the next 10 years on improving military housing. That is hugely significant.

The noble Lord, Lord Fox, mentioned reputation. I often say that this country faces challenges, but the idea that this country is not respected in Europe or across the globe is not true. In fact, this country is hugely respected in Europe and across the globe. Do not take my word for it: read what the Secretary-General, Mark Rutte, said about the defence investment plan. He welcomed it; noble Lords can read that in today’s and yesterday’s papers.

With respect to the important contribution that we make to NATO—I do not want to risk the ire of the noble Baroness, Lady Bennett—I just remind everyone that one of the most important contributions that our country makes is through the nuclear deterrent. That is a huge contribution that we make to the security of NATO and of Europe, and to our defence.

On GCAP, of course there is always a need to look at new partners. A few weeks ago, the noble Lord, Lord Fox, and many other noble Lords questioned whether GCAP would actually be in the document. Now the accusation is that we are spending it too late—it is over £8 billion-worth of money—and that it is not being spent quickly enough. A huge amount of money has gone into GCAP. Of course the Government will negotiate on new partners, but that has to be agreed not only with us but with Italy and Japan. That is important for us as well.

There is a whole section on SMEs in the defence investment plan; it is not only on the big primes but on the SMEs. I say to the noble Baroness, Lady Goldie, that all the chiefs are content with the defence investment plan and have been involved in bringing it forward.

A number of noble Lords asked me about private finance initiatives and how we can bring that on board. I know that the Government are looking at the Defence, Security and Resilience Bank and whether that is a good way forward rather than necessarily defence bonds, which count as borrowing. No decisions have been taken about that, but we are of course looking at alternative ways of bringing that in. I say to the noble Lord that we tried very hard to get into SAFE, but we failed—we could not get into it. So it is not a question of trying to get into it; we tried and we will try again, but we were not successful. But in the meantime, the country will obviously continue to do what it can to build up its own defences.

The defence investment plan is a huge contribution to the defence of this country. It points to a way forward, it is transformative and it improves our readiness. For any investment plan brought before this House and indeed this country, that is quite an important statement of where we are.

Defence Investment Plan

Lord Fox Excerpts

Tuesday 16th June 2026 Lords Chamber

[Lord Coaker (Lab)]

We are taking a lot of action on recruitment and retention. To give a couple of examples in the short time I have, the announcement last week about the further increase to Armed Forces personnel pay was important, showing that the Government support and respect the work they do. There is also the work we are doing on military housing; that is an important statement as well. We are taking a variety of measures in a variety of ways to ensure the value that we all place upon our Armed Forces personnel.

[Lord Fox (LD)]

One way of achieving the objectives that my noble friend spoke about, to give some certainty, could be for the UK to join the defence, security and resilience bank. In answer to a Question I asked on 19 May, the noble Lord, Lord Livermore, said that the Government had “no current plans” to join that bank. However, the Canadian High Commissioner said late last week that Gordon Brown had talked to Mark Carney about the UK joining the bank and that talks were ongoing between it, the Treasury and the Ministry of Defence. Can the Minister clear up for your Lordships’ House whether we are or are not seeking to join that bank?

[Lord Coaker (Lab)]

I cannot say that we are seeking to join that bank, but within the MoD and across government there are considerations of what other mechanisms we might use to fund defence.

UK Homeland Defence

Lord Fox Excerpts

Monday 23rd March 2026 Lords Chamber

[Lord Coaker (Lab)]

It is very urgent to have that conversation. I think everybody understands and accepts that. I go back to the noble Lord’s point about defence spending; it requires that conversation, so that will take place. To pick up the other point, I have said time and again from this Dispatch Box that NATO, we and many of our friends and allies need to rediscover the theory of deterrence. You prevent war by preparing for war. You prevent war by people believing that you will actually respond if they break international law. That is a really important point. The rediscovery of deterrence is important. My noble friend’s point about having a national conversation is really important.

[Lord Fox (LD)]

My Lords, the Minister has mentioned defence spending on a number of different occasions without mentioning the defence investment plan. It would be remiss of your Lordships if we did not go back to the Minister and ask: when will this plan be published? Our credibility in NATO requires us to demonstrate the spending that has been announced, so when will the plan be published?

[Lord Coaker (Lab)]

I was hoping the noble Lord was going to start with the Leonardo announcement, which he pressed me for in terms of spending; we pocketed that one and moved on. Leonardo was a huge investment that the noble Lord was demanding I do something about. I went back, argued with the department and talked to other Ministers. There is a point about the defence investment plan, and I have answered the questions of the noble Baroness with respect to that. But let us be clear: defence is not standing still. There are many projects.

In Scotland, on the Clyde and in Rosyth, there are ships being built. Billions of pounds are being spent on Plymouth dockyards and on renovating military housing. There is the contract with Leonardo helicopters I announced earlier. Of course, there is a debate about what the total outlay by the Government should be, and we heard from the noble and gallant Lord, Lord Stirrup, and my noble friend Lord West about those matters, but the belief that the Government are not spending anything and not doing anything is something we should dispel, because billions of pounds-worth of investment are being put into the defence of this country, including, as we progress, into the air and missile defence of the country. That is something we can also be proud of and talk about, as well as the challenges we face.

Iran and the Middle East

Lord Fox Excerpts

Monday 9th March 2026 Lords Chamber

[Baroness Chapman of Darlington (Lab)]

Any threats to BBC Persian service staff in London or anywhere else—but certainly any threats in this country—are completely unacceptable, and our security services and the police work hard to keep them safe. One of the atrocious things about the Iranian regime is the way it has sought to act in the way it has against journalists and those wishing to report the truth about what is happening in Iran.

[Lord Fox (LD)]

My Lords, one of the consequences of the conflict has been President Trump seeming to clear India and other countries to break sanctions and buy Russian oil, which clearly changes the balance of the economy in the Ukraine war. Does the Minister agree that any political party, particularly His Majesty’s Opposition, which chooses unequivocally to support Donald Trump, is absolutely supporting this policy and letting Ukraine down?

[Baroness Chapman of Darlington (Lab)]

The noble Lord is right in that all these conflicts are interconnected in many subtle ways that often are not immediately obvious to those seeking to make political points in this country. It is obviously a matter for His Majesty’s Opposition to answer for their own conduct.

Ministry of Defence: Palantir Contracts

Lord Fox Excerpts

Wednesday 11th February 2026 Lords Chamber

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, I thank the noble Baroness, Lady Goldie, for the courteous way in which she asked the question. I will reflect on what she has said and respond appropriately once I have discussed it with others.

On the fundamental issue of single-source contracts, I can do no better than to quote the Conservative spokesperson in the other place, who said:

“It is true that many contracts in the MOD are rightly let on a single-source basis”.—[Official Report, Commons, 10/2/26; col. 691.]


In this particular instance, the MoD judged the capabilities and record of Palantir in the delivery of the systems that it has, and the artificial intelligence and data sharing that can take place, which started with the enterprise agreement that the last Government entered into in 2022, enabling Palantir to embed itself in all sorts of operations that were and are ongoing and will continue. The transparency notice that we published a few weeks ago, in December, laid out why the direct award was justified in this case, giving it to Palantir as a single-source contract and not making it available to more general competition. It was in our interests, the interests of the MoD and the interests of our country that we let that contract to Palantir to deliver the very special capabilities that it has.

[Lord Fox (LD)]

My Lords, leaving aside the nature of the ownership of Palantir and the questionable involvement of Peter Mandelson, we have another key concern. On the Government’s own admission, this is a strategic contract. It seems that only Palantir is in a position to deliver this, otherwise it would have been a contested commissioning. The Minister in the Commons has said that the data will remain under sovereign protection. However, the core competence of developing the ways of using that data for AI will rest with Palantir and will be embedded, as the Minister has said, with its proprietary systems and software. Does the Minister share my concern that this is outsourcing what should be a sovereign capability—not just owning the data but knowing how to use it? Does he recognise that we will be reliant for crucial AI expertise embedded across the defence industry on a single US supplier?

[Lord Coaker (Lab)]

I say to the noble Lord, who asks an important question with respect to this, that the UK defence data used and developed in Palantir’s software remains sovereign and under the control of the MoD. It resides in the United Kingdom. We have clear contractual controls in place to ensure that, as well as control over the data system that Palantir software sits upon. Any change from this cannot be conducted without the consent of the United Kingdom, so very real protections are in place to ensure that we can get the benefits from Palantir while protecting the data and information, so that we can allay the noble Lord’s concerns.

New Medium Helicopter Contract

Lord Fox Excerpts

Wednesday 14th January 2026 Lords Chamber

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

The noble Baroness will know that the final decision on the award of the new medium helicopter contract will be made through the wider defence investment plan. With respect to what she said about the defence industry being a desert, the Government have signed 1,000 major defence contracts since July 2024, 86% of which have been with British companies. Many contracts relate to lethal capabilities and are not published for national security reasons. We are spending billions of pounds on British industry; we want to grow its capacity and are doing all we can to support it. However, on the noble Baroness’s specific question about Leonardo, that will have to wait for the defence investment plan.

[Lord Fox (LD)]

My Lords, I met Leonardo’s chair and CEO today. He told me that, as the Minister may know, Yeovil accounts for 3,300 direct jobs and an annual input into the local economy of £320 million. As the Minister also knows, that is our only sovereign capability for full helicopter construction and it has huge export potential. However, there is a real prospect that this will be the Government who close the gates on Westland for the last time. All this seems to hinge on the defence investment plan but, even if that plan is published soon, and even if it indicates that the medium-lift contract is going to be funded, the real question is when. Work does not need to start now, but it needs to be a secure prospect for Leonardo: it needs to have a solid workflow, which means that contract negotiations have to start very quickly. Does the Minister recognise that, without that kind of certainty and knowledge of workflow, the Yeovil site is in real jeopardy?

[Lord Coaker (Lab)]

The noble Lord and I have spoken about this. I understand exactly the points that he has made with such passion, force and logic. I cannot say any more than that the final decision will be contained within the defence investment plan. The only thing that I will say to him is that we are spending billions of pounds on the defence industry, and that amount of money is increasing. Many noble Lords say it is not enough, but it is a hugely significant sum. I quoted the total CDEL figure last time and I will quote it again: in 2024-25, the total CDEL figure was £22.7 billion but in 2028-29 it will be £31.5 billion—a nearly £10 billion increase—and we are doing all that we can to ensure that as much of that money as possible is spent within the UK on the British defence industry. On the noble Lord’s specific question, as I said to the noble Baroness, I understand the importance of that factory and the jobs that depend on it, but the final decision will have to wait for the defence investment plan.

Defence Industrial Strategy

Lord Fox Excerpts

Wednesday 10th September 2025 Lords Chamber

[Baroness Goldie (Con)]

My Lords, I place on record my support for the enormous amount of work that has clearly gone into the production of this industrial strategy. It is very evident that those at the Ministry of Defence have put their thinking caps on, done the hard work and constructed a plan based around defence’s current and future requirements. There is therefore much to be applauded. The six priority outcomes are absolutely aiming in the right direction and the commitment to strengthening the MoD’s links with SMEs is particularly welcome.

A strong industrial base is vital for the future of our Armed Forces and our defensive resilience as a whole. The need has never been more evident than today, when we have seen a Russian incursion into a NATO ally’s airspace and the largest attack in Ukraine by Russia to date. This escalation is deeply troubling and underlines the importance of swiftly putting Britain into war-fighting readiness.

This is a solid piece of work, but the caveat is this: the solid piece of work crumbles if the bricks are not cemented together. That cement is implementation at a wartime pace. What matters now is that the words on these pages are translated into missiles, drones, equipment and ships. Critical to this is procurement. The chilling reality is that procurement has essentially dried up. There have been promising words in the SDR, but we have yet to see the major procurement contracts that the MoD has promised.

Procurement is the lifeblood of a successful industrial strategy. For example, I ask the Minister: how will the Government ensure that the Typhoon factory in Warton remains open and thriving? We have heard that the Government will be opening up six new munitions factories, but they must have orders. When will they be placed?

I understand that the promised defence investment plan will detail much of the procurement endeavour, but when? The defence industry has been waiting with bated breath since July of last year, and industry must have greater certainty. I implore the Minister to do everything in his power to ensure that the defence investment plan is published as soon as possible. In that connection, will the UK’s defence orders be joining a queue or with they be prioritised over orders for export?

When it comes to the new structures within the MoD, co-ordination of accountability to the Secretary of State is paramount. At the same time, duplication must be eradicated. The SDR and this strategy both mention the creation of a number of new bodies within the MoD: UK Defence Innovation, the Defence Industrial Joint Council, the office of defence exports, a defence office for small business growth and the national armaments director.

The strategic defence review identified a 10% reduction in Civil Service costs by 2030. Can the Minister clarify how, with the addition of these new offices, the MoD will achieve that staffing cost reduction? What existing structures will be merged or abolished, and who will be auditing progress? While I am on this topic, can the Minister update the House on the progress of appointing the national armaments director?

Page 30 of the industrial strategy details nine milestones to be reached by the end of this year. I do not believe any of these have as yet materialised, and the end of the year is fast approaching. Is the Minister confident that the 2025 timeline will be met?

In conclusion, I raise an issue that will come as no surprise to the Minister—budget. My right honourable friend the shadow Secretary of State and I have raised concerns about the bundling together of intelligence spending within the defence budget. That means that, despite the Government’s claims of spending 2.6% of GDP on defence by 2027, the actual money available to the MoD for defence spending is 2.2% of GDP. I am not trying to catch the Minister out, but I want to make this clear: the Government may have increased defence spending, but this level of spend is simply not enough to deliver everything in the SDR and indeed in this industrial strategy.

The Russian incursion into Polish airspace yesterday and the triggering of Article 4 of the North Atlantic Treaty serve as a stark warning: complacency is not an option. The contents of this strategy, which, as I have said, these Benches fully support, cannot be a prayer for the future. Wartime pace means delivering from now on and, quite simply, there is no safe alternative.

[Lord Fox (LD)]

My Lords, it is a pleasure and a challenge to follow the noble Baroness, Lady Goldie, who has such expertise in this area. We on these Benches also welcome the Government’s announcement of this new defence industrial strategy. We support the objectives of both boosting defence capability and increasing economic activity within our country. As someone who has worked in the sector—I no longer have an interest in it—I can say that, in the main, the jobs in the defence sector are high-quality jobs that pay well over the national average, so they are very worthwhile jobs for our citizens. More than that, they will contribute in large measure, we hope, to the resilience and security of our country.

Like the noble Baroness, Lady Goldie, I will focus on procurement. I will not repeat the questions that she has already asked, although I am very interested in the answers. It is clear that an improved framework is needed and that, in the Government’s own words, waste, delay and complexity have prevailed. Big changes are therefore needed. We also support the aims of involving more SMEs and driving innovation. These are important, but how? Section 7 of the strategy sets out some details of process, but I would suggest that, as well as process, this all requires an entire change of culture across the sector, from the MoD to the primes and the SMEs. How will the Government fast-track the necessary culture changes that we need in order to move at pace?

The implementation of a UK offset regime is welcome and the sections in the strategy are encouraging. I appreciate that consultation is needed, but I also note that there are—we hope—contracts being let already before this regime is put in. Can the Minister tell your Lordships’ House how any offsets will be gained from contracts that are let before then?

Similarly, a buy British focus is really good and very important. However, some contracts are being let at the moment that do the exact opposite. They are contracts that may call into question the future of established capacity in this country: capacity that, once lost, will not be regained. Can the Minister therefore ensure that these are reviewed as soon as possible to ensure that permanent damage is not being done before this strategy is implemented. I will be happy to discuss further details on that with the Minister.

In the Spring Statement, Rachel Reeves confirmed an extra £2.2 billion of UK military funding. This increase will be paid for by cuts in overseas aid, which the Minister knows we deplore. This strategy contains spending of £773 million on the Government’s estimate, but can the Minister confirm that this is not in fact new money, but money out of the pot that was announced in the spring by the Chancellor? At the time, the Chancellor also announced the new Defence Growth Board. Can the Minister say what role this will play, and indeed what role it has played in the preparation of this strategy? How does this fit with the new defence investors advisory group that is announced in the strategy?

I also seek information on the whereabouts of the Defence Growth Partnership, which has been in place for some time and shares many of the same aims, particularly around SMEs and innovation. What is its role? Is it still working and how does it contribute?

A key drag on the success of this strategy will be the lack of available skills. Part of this announcement includes skills investment, which is largely focused on five new defence technology colleges. This is also welcome, as is the emphasis on apprentices. However, what is the role of Skills England in all this, given that it was supposed to be part of the picture on the national skills programme.

Following events, it is very clear that things are moving very fast globally, and moving in the wrong direction. They underscore the vital importance of working alongside our European allies in securing the UK’s defence. As I am sure the Minister will tell us, we continue to play key roles in JEF, E3 and other groupings, while NATO is of course our foremost security defence relationship and always will be. However, more can be done to deepen the co-operation and integration with our European allies. They share security challenges and together we can build scale to rearm at pace. Will the Government, for example, now agree to seek the UK’s associate membership of the European Defence Agency?

While EU institutions have a more limited role in defence, the Security Action for Europe—SAFE—defence fund is being established by the EU Commission. Recognising the opportunity that SAFE presents, the Minister of State, Stephen Doughty, told the Foreign Affairs Select Committee on Monday:

“It is a €150 billion instrument. It is very significant and could lead to significant opportunities for our defence industries”.


Can the Minister therefore update your Lordships’ House on the UK’s discussions with the Commission and the nation states on our participation in SAFE and tell us whether UK industry will be eligible to bid in the first round, which I believe is in November?

I have lots more queries, but I close by saying that this strategy is a first step and I absolutely concur with the noble Baroness that implementation is key to its success. We will happily support and work with the Government to help deliver the strategy and its objectives.

[The Minister of State, Ministry of Defence (Lord Coaker) (Lab)]

My Lords, I thank the noble Lord, Lord Fox, for his constructive comments about the strategy and the important questions he asked. I know it is from a position of support for our overall direction. I say the same to the noble Baroness, Lady Goldie; I know that her questions are from a position of overall support for the strategy, but seek clarification on how we can improve it in the interests of our country and the nation’s Armed Forces. I very much appreciate the comments from both the noble Lord and the noble Baroness.

Notwithstanding the points that have just been made, sometimes we, as a nation, do not praise some of the things that are happening. Yesterday I was at DSEI at the Excel centre, which I know the noble Baroness and the noble Lord will be aware of. It was a phenomenal statement about UK industry and UK business—small, medium and large—and what a phenomenal statement about the projection of British power across the globe. Many noble Lords have told me they have been, or will go, to DSEI and they too have been overwhelmed by the number of foreign visitors, armed forces and businesses that are here.

So, yes, there are questions about our strategy and how we might do better, but I challenge anybody—and this is for the audience out there, rather than in here—to not say that we have an awful lot of which to be proud in this country when we look at DSEI. I know that is a view shared by everyone, and it is an important starting point.

The strategy seeks to do more in different ways. I will try to run through many of the questions asked by the noble Baroness and the noble Lord, Lord Fox. Yes, it is about trying to get to war-fighting readiness. We cannot have a situation, now or in the future, where we cannot do what we want to do because we cannot produce the equipment we need at the pace we need it. We must do better than we have done, and part of that is building our sovereign capability. Of course we will work with our international allies, but sovereign capability has been something that we have not given enough attention to over the past few decades. The noble Baroness and the noble Lord asked about the implementation plan. A whole chapter is dedicated to implementation. In each part, there are matrices about being held to account. The noble Baroness is right that on page 30 there are things that have yet to be implemented. I would point out that the strategy was published on Monday, but we are doing our best to get going.

On implementation, can I read directly from a note I was given, since I asked about this? An implementation team headed by a senior civil servant has been created. The Chancellor and the Defence Secretary—note to the noble Lord, Lord Fox—will hold the department to account via the defence growth board, and the Defence Industrial Joint Council will monitor delivery with our industry partners. The defence growth board will continue to exist to try to ensure, through the Chancellor and the Defence Secretary, that all the various things that are outlined in the strategy are delivered.

In relation to what the noble Baroness said, we are working hard to try to protect jobs with respect to Typhoon. We have allocated £6 billion to munitions factories over the lifetime of the Parliament, with the six additional munitions sites, to try to ensure that we can have the munitions that we need. The defence investment plan will be this autumn.

The 10% reduction in the Civil Service headcount that the noble Baroness referred to is the aspiration. The new boards and bodies that are set up will see others disappear, others amalgamated, but all of it trying to give a greater focus. The noble Baroness went through some of the new bodies. They are not in addition to the existing bodies; they are going to be more directly focused to deliver the outcome we want and will subsume some of the existing bodies. We wait to see how that happens.

On the national armaments director, we have an interim director who will be in post for a period while we recruit the new director. I am not certain of the exact timetable for that. In terms of intelligence spending and defence spending, I think the amalgamation of that is not a smoke and mirrors; it is to try to reflect the reality of the new geopolitical context of our time, where we talk about homeland defence, cyber, and the importance of our security agencies working with our Armed Forces. The totality of the defence and security of our nation encapsulates all the above, and that is the totality of the spending. The noble Baroness and others can debate whether it is enough, but that is the concept behind joining those two together—to give us a sense of how much is being spent in the sphere. I know my noble friend Lord Beamish is behind us and will know the importance of some of the work that intelligence does to keep us safe, particularly from a homeland perspective.

The noble Lord, Lord Fox, asked about fast-tracking cultural change. I totally agree with that. Let me give the noble Lord one example of that. Why does the urgent operational requirement operate only when there is a war or a crisis? Why can we not bring that same culture—I think the noble Baroness asked this when she was a Minister—that same process and that same attitude to the situation when it is not a crisis or a war? It is not about being flippant; it is not about disregarding proper financial process, but it is about saying: “Come on, let’s get these decisions made; let’s give some certainty; let’s give a drumbeat to orders”. If we can do that, we will do ourselves a favour. I am perfectly happy to meet the noble Lord and others, if he wishes, with my colleague. I will volunteer him for it with the Defence Procurement Minister, and we can discuss the point he made about offset.

Offset is a really interesting concept as we go forward—the idea of trying to have mutual benefits. If we buy abroad, how can we ensure through offset that we do not lose any benefit that may accrue or that a complementary benefit accrues to UK industry? I take the noble Lord’s point, which was on what happens before the offset system comes into effect, and we will consult on that. What happens if decisions are made now? I will take some advice on that and talk to the noble Lord and his friends.

The noble Lord also mentioned skills. Skills is a massive issue for our country. If a cultural change is needed anywhere, it is in trying to ensure that skills-based occupations, skills-based learning and skills-based opportunities are seen to be as valuable as some of the other opportunities. That the skills option is not seen in that way has bedevilled our country for decades. We are trying to deal with that through the defence technical colleges. We are going to work with Skills England and the devolved nations—he will have noticed that the devolved colleges are here.

On working with our European allies, of course we will work with them. We have the EU-UK security and defence partnership. I say to the noble Lord that we could not have entered SAFE without an EU-UK security partnership. The fact that we have that means that we can start to answer all the questions that the noble Lord has asked.

I thank the noble Baroness and the noble Lord for their support; I hope that I have answered many of the questions that they asked. This is an exciting time. At the end of the day, the defence industry is on the front line with us. If we want to defend our democracy, we need to improve, extend and develop our industrial capability as well.

Russian Maritime Activity and UK Response

Lord Fox Excerpts

Tuesday 28th January 2025 Lords Chamber

[Lord Coaker (Lab)]

I do not know what the noble and gallant Lord would say to me if he disliked me.

Having said that, he raised a number of really important points. He heard what I said about funding in response to the noble Baronesses, and we are looking to set out the pathway to that. Others will have heard his call for more resources. There are issues around what capabilities we have and how we take them forward; we have heard demands not only to provide traditional capabilities but to be prepared for the changing threats we face and to establish how we develop the capability to deal with them.

My reading of the view that other countries have of us does not entirely accord with that of the noble and gallant Lord. In many respects, the NATO countries that I have met, notwithstanding the debates about capabilities, often look to the UK to see what we think about what we should do and for leadership.

I have already outlined the NATO response to what is happening in the Baltic with Baltic Sentry. That is a group of allies from NATO: eight countries coming together to provide maritime capability and do other things, and we are providing the reconnaissance for some of that. That is a NATO project, a NATO alliance acting together to deliver security. Of course, the whole point of NATO is that each country comes together to do that. We are looking at the capabilities that the noble and gallant Lord mentioned, but also as part of that, we have the JEF, which is a complementary part of NATO specifically looking at the Northern region, and the UK set that up; the UK is the lead for that. The Nordic Warden campaign that has been set up is run from London, based at Northwood, and the JEF countries are looking to us to provide that leadership, because we are the only country that has the necessary artificial intelligence which allows us to track some of the vessels that we may be concerned about.

Yes, there are issues, and the noble and gallant Lord laid them out very articulately. I just say to him that we are developing abilities, and I would say that, in my view, our role and status within NATO, and the view that many other countries have of us, are perhaps higher than the noble and gallant Lord set out in his remarks. Certainly, that is what people say to me when they say, “Where is the UK on this, because we want to see them there with us?”

[Lord Fox (LD)]

My Lords, whether one signs up to the noble and gallant Lord’s view or the Minister’s, I think it is safe to say that the NATO theatre is becoming ever warmer and the requirements from the United Kingdom are getting greater. But it is not only in NATO that we make commitments. As the Minister will know, we are set to join the US-Bahrain Comprehensive Security Integration and Prosperity Agreement—a very long name—which cements us into quite considerable naval activity based in Bahrain. Does the Minister share my concern that we are cementing and placing resources that we cannot move back into the European theatre by signing this treaty, and it puts another strain on already strained resources?

[Lord Coaker (Lab)]

I understand the point the noble Lord is making with respect to Bahrain, but let me say this. The UK acts wherever it needs to to protect its interests. I often make the point about the indivisibility of conflict. I went to Vietnam recently. Vietnam is concerned about Ukraine, because it has brought Russia and China closer together in a way that it never expected. I am proud of the fact that, notwithstanding Bahrain, later this year, we will lead a carrier strike group out into the Indo-Pacific to demonstrate that the law of the sea, the international rules-based order, is something that is important to us. There are numerous countries, both in Europe and in the Far East, including our allies Australia and New Zealand, that will stand with us in delivering that capability. Defending the rule of law in those areas is important. You cannot divide peace and security in one part of the world from peace and security in another, and I for one am pleased that the carrier strike group is going out into the Indo-Pacific later this year.

Decommissioned Nuclear-Powered Submarines

Lord Fox Excerpts

Wednesday 23rd October 2024 Lords Chamber

[Lord Fox (LD)]

My Lords, the noble Baroness, Lady Bryan, mentioned the disposal of nuclear material as and when it is eventually removed from the submarines. Can the Minister confirm, perhaps by letter, whether the establishment of a new disposal site—which has been debated for many years and is still no nearer, as far I can tell—will require primary legislation to be enacted? If not, how would the planning process be developed for the future disposal of that nuclear material?

[Lord Coaker (Lab)]

I may need to write to the noble Lord. I usually like to be able to respond directly to questions, but I do not want to get the planning process wrong or give the wrong answer on whether primary or secondary legislation is needed. I will respond to him with a letter to make sure that I am accurate and will place a copy in the Library so that it is available to all noble Lords.

Combat Air Capability

Lord Fox Excerpts

Thursday 10th October 2024 Lords Chamber

[Lord Coaker (Lab)]

The noble Baroness will know that I know Northern Ireland reasonably well and I have seen the fantastic skills base that Northern Ireland has. At the moment, as it stands, the particular emphasis in respect of the Global Combat Air Programme is that the main centres are in the south-west of England, Lancashire and Edinburgh. Of course, the spin-off from that is numerous small industries. We need to ensure that the growth agenda of this Government reaches all parts of the United Kingdom, including Northern Ireland, as the noble Baroness pointed out.

[Lord Fox (LD)]

My Lords, manned aircraft require a supply of pilots. Is the Minister satisfied that sufficient resources are being made available to train the pilots of the future and that they are getting sufficient, real airtime in order to be effective?

[Lord Coaker (Lab)]

The noble Lord knows that there have been problems with the training of pilots. That is partly the point of his question. The Government are looking at training and also at the recruitment and retention of all these particular skills, not just in respect of pilots but right across the Armed Forces. That is why this Government have launched a recruitment and retention review to see what we should do about it. Pilots will form an important part of that.