Defence Funding
Thursday, 17 September 2026
Contributions
Question
Asked by
Baroness Foster of Oxton
To ask His Majesty’s Government whether they plan to reduce the welfare budget to fund defence.
The Parliamentary Secretary, HM Treasury (Lord Pitt-Watson) (Lab)
The Government’s commitment to the defence of this country is absolute. We have the third-highest absolute expenditure on defence among our allies. We will honour our NATO commitment of 3.5% by 2035. In direct answer to the question from the noble Lord, Lord Bellingham, we will set the target date in the spending review for 3%. We are also committed to bear down on the welfare bill, but not by arbitrarily punishing those who depend on it. Finally, I note, and I hope the House understands this, that these two issues are not inextricably linked and that it is a danger if politicians suggest that we need to make false choices.
Baroness Foster of Oxton (Con)
My Lords, I thank the Minister for his reply, but the fact is that the welfare bill is heading towards £350 billion. The total income tax take last year was £330 billion, with public sector debt reaching 94% by mid-2026. In the last Government, Sir Keir Starmer could not persuade his Back-Benchers to reduce the welfare bill by £5 billion per annum. So, I ask the Minister: can we assume that this Prime Minister will also continue to put social security before national security in order for his Members of Parliament to hang on to their parliamentary seats?
Lord Pitt-Watson (Lab)
My Lords, that is exactly the sort of false choice that we need to guard against. We want to be clear that we spend the welfare budget well. That is why we have the Timms review on PIPs and why we have the Milburn review on NEETs and getting a system for getting people back to work. Since it was quite a long question, I would like to tell noble Lords about fraud. By the end of this Parliament, the Government will be saving £4.3 billion on fraud in the welfare system that they inherited. I think they learned from the noble Lord, Lord Agnew, a Conservative Peer and one of my predecessors, who stood at this Dispatch Box and said that it was arrogance, indolence and ignorance that was stopping us bearing down on it and that he hoped his resignation would make someone do something about it. We are and we will.
Lord Beamish (Lab)
My Lords, first, I apologise to the House for sounding like a broken record, but does my noble friend agree with me that the Benches opposite should have a bit of humility? When they were in government, from 2010 to 2016, they cut the defence budget by 16%, made members of our Armed Forces compulsorily redundant, leading to the smallest standing Army since Napoleonic times, and, in collusion with their Liberal Democrat coalition partners, delayed the implementation of the replacement of the nuclear deterrent, adding billions to the cost. Does my noble friend also agree that the choice they are putting forward between defence and welfare is a false one and that they need to explain how they would get money out of the welfare budget, not in the future but today, to reinforce the defence budget?
Lord Pitt-Watson (Lab)
I completely agree with those statements. Let us recognise that in 2025 this Government committed to the largest sustained increase in defence spending since the end of the Cold War, after years, as my noble friend pointed out, of decline. I hope I will have an opportunity to come back and talk about the welfare budget and the Conservative proposals for it later on in Questions; I should allow time for that.
Lord Bruce of Bennachie (LD)
Is it not unfortunate that the Conservatives, who are in no way blameless for the parlous state of the public finances, are arguing the case for defence on the basis of saying that the people who should bear the burden of topping up the defence budget are the poorest, the most disabled and the most disadvantaged? That, of course, is the Conservative Party in a nutshell. Does the Minister recognise that the sooner the Government deliver clearly how they are going to achieve the 3%, so that procurement can start now, the sooner we can have a sensible debate on benefit priorities?
Lord Pitt-Watson (Lab)
As I said, the 3% timing will be declared at the spending review. I do not want to do all the criticising of other parties, actually; I am trying to maintain a collegiate House. But I do remember, a couple of weeks ago, the right reverend Prelate the Bishop of Coventry talked about old people, who she said were of “immeasurable worth”. Everyone is of immeasurable worth. Of course we need to talk about big numbers for defence and welfare, but real people depend on welfare and those real people are of immeasurable worth. That should inform our debate.
Lord Altrincham (Con)
How should our adversaries interpret the Treasury’s defence stance?
Lord Pitt-Watson (Lab)
That the Government have an absolute commitment to the defence of this nation; that we already have the third-highest absolute expenditure among our allies; that we will honour our NATO commitment of 3.5% by 2035 and set a target for 3% on defence at the spending review; and that in 2025 we committed to the largest sustained increase in defence spending since the end of the Cold War. That is not bad.
Lord Dannatt (CB)
My Lords—
Baroness Meyer (Con)
My Lords—
Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)
My Lords, it is the turn of the Cross Benches.
Lord Dannatt (CB)
My Lords, does the Minister agree that progress towards the 3% and 3.5% targets for defence spending can best be described as glacial? Will he undertake that the Treasury will look at imaginative ways of funding defence, in particular the innovative contribution that small and medium-sized enterprises can make, along with their access to private funding? It does not all have to come from the Treasury.
Lord Pitt-Watson (Lab)
I think the reference to private companies and what defence spending can do for the economy is very important. If I have my figures right, the additional investment we will be making will create 60,000 more jobs in the private sector. So we are aware of this important point and I thank the noble and gallant Lord.
The Lord Bishop of Leicester
My Lords, the best causally identified route of the rise of populist parties and extremist groups in this country is poverty, alongside deindustrialisation, austerity and perceived community decline. Does the Minister agree that the duty of a Government to protect their citizens includes protecting them from internal threats as well as external ones?
Lord Pitt-Watson (Lab)
I think I have made the Government’s position on that reasonably clear. Let us just look at the proposal we have, for example on housing benefit, from the party opposite to take £4 billion off the budget, which is something like £13.5 billion or £14 billion. Have we thought about how many people that would make homeless? Have we thought about how many of them would then turn up, of course with the right to be housed if they have children? Noble Lords can hear where I am coming from.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, could my noble friend and fellow Scotsman give us a few examples of sensible savings that the Government are making to our welfare budget?
Lord Pitt-Watson (Lab)
Yes. I would answer that by saying that £4.3 billion will be saved as a result of the biggest crackdown in a generation. I thank the noble Lord, Lord Agnew, for his passion on that when he stood at this Dispatch Box. We are responding to his call to take action.
Source: UK Parliament Hansard API. Debate ID: 5409256.