Contribution
My Lords, we welcome this Statement. From the outset of the brutal Russian invasion of Ukraine, there has been a consensus across Parliament that we must support the Ukrainian people in their struggle against aggression. We do so not just because they deserve our support in their own right but because success for Putin in Ukraine would simply be a prelude to further Russian expansionism, whether in the Baltics, the Caucasus or elsewhere in eastern Europe.
Nothing which has happened in Ukraine over the past three years has caused us to question this approach—quite the opposite. What has changed is the posture of the United States. It is now clear that European nations cannot continue to rely on the US to support the defence of the continent in the same way as we did in the past. From day to day, it is impossible to know quite what the US President will say next, but in one respect President Trump has been consistent: he expects Europe to pay more for its own defence and he will make the continuation of the US’s military commitments in Europe contingent on this.
We and other European nations are going to have to spend more—considerably more—on defence, and to do so at a time when public sector finances are already under considerable strain. We therefore welcome the Government’s decision to move to a level of defence expenditure of 2.5% of GDP by 2027, and their further aim of getting to 3% in the next Parliament. We need to considerably increase our capabilities and replenish our equipment stocks. As a first priority, the Government should reverse the 10,000 reduction in the number of our troops, over which the previous Administration presided. It is now highly likely that we are going to have to provide boots on the ground in Ukraine; the Army is simply too small at present to be able to do this on anything like the scale required. We must also, however, achieve much greater value for money on equipment development and procurement than we have in the past. We therefore welcome the Government’s commitment to a new defence reform and efficiency plan.
We are, however, surprised and disappointed that the Government have decided that the entire funding of this additional expenditure should come from further cuts to development assistance. This seems to be a strategic error as it will simply reduce further our soft power, leaving space for Russia and China in particular to fill. Given that most aid is preventive of disease, climate change or conflict, it will exacerbate problems which will spill over to us. That is a false economy. Can the Government, at the very least, commit to protecting expenditure on Sudan—not just prioritising it, which is a rather weaselly phrase—given the extraordinarily severe humanitarian crisis now facing that country?
We have suggested funding the increase to 2.5% in a different way—by an increase in the digital services tax from 2% to 10%—but there are other ways of raising the necessary revenue, as we suggested in our general election manifesto, which could be deployed without raiding the aid budget. As for the 3%, we have already suggested that there should now be urgent all-party talks to explore how we can achieve that on a cross-party basis. Can the noble Baroness the Leader say whether the Government have any plans to adopt this approach?
Further to the Question earlier today in your Lordships’ House on the £20 billion of frozen Russian assets in western banks, there is agreement that those should be released to help Ukraine in its continuing military activities and to help rebuild the country once hostilities end. Frankly, nothing seems to be happening to achieve this. The Prime Minister could play a leadership role here by convening a European conference in London to agree on how this can best be achieved and by raising it tomorrow with President Trump. Do the Government have any plans to take such initiatives?
Faced with the changed US posture on European security, all European nations will have to play a greater part in the continent’s defence. This Statement demonstrates that the UK is willing to make that commitment, and we support that stance, but let us not do so by further decimating our aid budget and making some of the world’s poorest people pay.