Mr Joshua Reynolds

Once again, the hon. Gentleman is confusing rejoining the single market and customs union with rejoining the European Union. I am glad that the Defence Secretary is in his place, because just days ago, he said that we need to be ready for war by 2030, within 1,000 days. I take that warning seriously, and I hope that his colleagues do, too. Yesterday, the Chancellor set the target for spending 3% of GDP on defence by 2030, and the plan to pay for that will come in next year’s spending review. The money needed for the issues and compromises that the Defence Secretary describes will not come until next year. No Government can meet a 1,000-day deadline on a funding plan that does not exist. That is why we Liberal Democrats have proposed defence bonds. Our plan would raise £20 billion over two years, ringfenced to rebuild our armed forces. That would start now, inside the Defence Secretary’s 1,000 days, and not after them. Meanwhile, the Government are funding their defence investment plan by cutting budgets across Whitehall. Earlier this year, Departments were told to cut 1% from their capital budgets to pay for the first £10.3 billion of the DIP. For the remaining £5 billion, they must now find another 1% on top of that. As has already been mentioned, we do not know where the cuts will come from. Families right across the country want to know which capital projects are to be cut. Will it be the rebuilding of our crumbling schools or our leaking hospitals? Where will that money come from? We are asked to choose between security and growth, but we need both. The Government urgently need to make the case for defence bonds, so that we have the money to rebuild our defences as soon as possible. If we built that capacity alongside our European partners, every pound would go further, and support skilled jobs and British businesses in the supply chain. We have also set out how to keep that investment going for the long term: through the digital services tax. We would raise the tax from 2% to 10%, bringing in billions of pounds a year from the tech and social media giants by 2030. They are some of the most profitable companies in the world, and they should pay their fair share. Our plan shows how, and it is fully costed. Defence bonds will provide the money up front, and the higher digital services tax would sustain that amount year after year. Together, they would pay for us to expand British shipbuilding and build more frigates to protect our waters. Our European neighbours are investing billions in their defence industries, and Britain must be at the heart of that, not watching from the sidelines. We need our new growth and defence partnership with Europe—buying together, building together and defending our continent together—to ensure that British shipyards, engineers and factories win jobs and investments from European contracts. If we are shut out, those jobs go elsewhere. This Budget is a holding pattern Budget; it is not the growth Budget that we all needed. There is a better way: growth with Europe; fairer taxes that ask the big banks, rather than hard-pressed savers, to pay their share; lower bills for every household; and a serious plan for our security. That is what fiscal responsibility looks like. We need to grow our economy, cut people’s bills and cut people’s taxes.