Lord Livermore (Lab)

I am grateful to the noble Lord for his question. He knows that the previous Government increased welfare spending by £88 billion in their last five years, which is quite a legacy for us to have inherited. He also knows that we are delivering the biggest sustained increase in defence spending since the Cold War. As I have said already, the Chancellor has approved access for the Ministry of Defence to use the special reserve to deploy additional capabilities in the Middle East. He asked me how we will increase defence spending. We are investing £270 billion over this Parliament, after years of our Armed Forces being neglected under the previous Government. We will increase defence spending to 2.6% of GDP from 2027 and we are increasing spending on defence by £5 billion in this year alone. Our ambition is to reach 3% in the next Parliament, when fiscal and economic conditions allow. We are not going to put an arbitrary date on that percentage until we know exactly where the money is coming from. I should also say that, this week, the Chancellor announced a new defence procurement mechanism. A core group of NATO allies—Finland, the Netherlands, the UK and other partners—have announced that they are exploring setting up a new mechanism for financing by 2027. The aim is to aggregate demand to drive joint procurement, accelerate defence investment and increase the availability of critical capabilities.