Defence Spending (Hansard, 2 April 1996)

§ 11. Mr. Butler
To ask the Secretary of State for Defence what assessment he has made of the effect on existing military capability of reducing United Kingdom defence spending to the European average. [22316]

§ Mr. Arbuthnot
Reducing defence spending to the current NATO European average would involve cuts of more than £4.5 billion per year, which is about half of our entire procurement budget. That would clearly have a devastating effect on the capability of our armed forces.

§ Mr. Butler
This is clearly a very serious situation. Is the Minister telling the House that if such cuts were to be made—which, in the absence of any subsequent declaration from it, I understand to be Labour party policy—we would not be able to carry out either our international commitments or the defence of the realm?

§ Mr. Arbuthnot
Well, yes, but it is worse than that because of the letter that we have received from the Transport and General Workers Union—[Horn. MEMBERS: "Ah!"]—about which the Labour party seems to be rather uncomfortable. That letter echoes Labour party policy that has been passed at party conference, after party conference, after party conference. It means that we must consider the precise effect of cutting £18,000 million from our defence spending. Even if we simply reduced our level of spending to the European average—at least 42 Labour Members have signed a motion calling for that, and we know that that is the fundamental view of most of the Opposition—the programmes on the attack helicopter, the European fighter and the future frigate would be put in jeopardy. If we followed the policy set out by the TGWU, we would, as I have already said, be reduced to acting like traffic wardens.

§ Mr. Skinner
May I just remind the Minister of what I have told him before—it is getting very wearisome—that the Labour party conference passes resolutions to cut defence expenditure and the Tory Government carry them out?

§ Mr. Arbuthnot
The fact remains that the hon. Gentleman agrees with the demands of the Labour party conference to cut defence expenditure. He probably agrees with the TGWU that defence expenditure should be cut by £18 billion, because he does not believe in defence. In that respect, he is representative of the Labour party because one cannot trust Labour on defence.

§ Mr. Key
If we were to cut defence spending to the European average, would there be a severe cut in the number of jobs in the civilian support industries, such as the Defence Evaluation and Research Agency? That prospect would be far more frightening to the agency and its work force in my constituency than any proposal for possible privatisation, which could establish it as a world leader.

§ Mr. Arbuthnot
Yes. We would probably have to get rid of all research on defence and as a result we would have to buy equipment off the shelf. We would have to do that at the cheapest possible cost, which would almost certainly mean buying equipment from the United States of America—in fact, all our equipment would have to come from abroad. That would mean that the benefits to the defence industry from exports would be lost. In 1994, we won 15 per cent. of the world defence export market, but that was not good enough, because in 1995 that figure went up to 19 per cent. That success shows the strength of British industry today, and that strength would be lost if we were to cut spending on defence as the Labour party advocates.