💂‍♂️ Fiscal Policy: Defence Spending

• The government has confirmed its commitment to increase defence spending to 2.5% of GDP, with a plan to be set out in the spring alongside a strategic defence review (SDR).
• The urgency of increasing defence spending was highlighted in response to threats like the Russian presence in UK waters, emphasizing the need for a strong national defence.
• Concerns were raised about delays in achieving the 2.5% target beyond 2030, with questions about the Chancellor’s influence on the timeline.
• The government has already increased defence spending by £3 billion in the next financial year, which was stated as a positive step, but criticisms were made about the handling of defence under previous administrations.
• There are ongoing issues regarding taxes on death in service benefits for armed forces and the application of VAT on education for their children, with a call for exemptions similar to those given to US forces in the UK.
• The strategic defence review will address the changing nature of warfare, including lessons from the Ukraine conflict, and plans to renew capabilities and address recruitment and morale issues.
• There was a strong call from across the political spectrum for a comprehensive and supported defence strategy, not just for Labour but for all of Britain, to ensure national security.
• Discussions included concerns about the procurement system’s inefficiencies, with promises of reform to improve how defence spending is managed.
• Emphasis was placed on investing in skills and apprenticeships as part of any increased defence spending to support the workforce, both military and civilian.
• The future of naval capabilities, such as the decision on HMS Albion and HMS Bulwark, was questioned, with clarity promised in the upcoming strategic defence review.
• The government was urged to prioritize the operational needs of the armed forces over fiscal constraints and to keep the public informed about defence matters to maintain support for increased spending.

The session showed a moderate level of disagreement, which is why it receives a rating of 3. The disagreements primarily revolved around the timeline and specifics of the government’s commitment to reach 2.5% of GDP spending on defence. While there was consensus on the need to increase defence spending, differing views were expressed on when and how this should be achieved, as well as on related policies such as procurement and taxes on armed forces benefits.

Examples of disagreements include:

1. Timeline for 2.5% GDP Defence Spending: James Cartlidge challenged the minister on whether the 2.5% target would be met within the current Parliament, citing rumors of delays beyond 2030. The minister responded by reiterating the government’s commitment to outline a path to 2.5% during the spring but did not confirm a specific date, leading to uncertainty and disagreement on the timing.

2. Tax Policies and Armed Forces Benefits: There was contention over the application of inheritance tax to death in service benefits and the VAT on education for children of armed forces families. James Cartlidge criticized the government for these decisions, while the minister clarified the exemptions available and ongoing consultations with the Treasury, indicating policy disagreements.

3. Defence Procurement and Efficiency: Helen Maguire raised concerns about inefficient defence procurement and the need for a credible plan to address previous cuts to the Army. The minister acknowledged these issues but highlighted past actions taken by the current government and implied criticism of previous administrations, showing a disagreement on the approach to procurement.

4. Political Criticism and Historical Context: Throughout the session, there were several instances where members from different parties accused each other of past failures in defence spending and strategy. For example, Luke Pollard criticized the previous Conservative government for underfunding and hollowing out the military, while Sir Julian Lewis pointed out historical spending levels under Conservative governments, indicating a fundamental disagreement on historical performance and current responsibilities.

While there was disagreement, it did not escalate to personal attacks or disruptive behavior, and the session remained focused on policy and historical context. Some areas, such as the need for increased defence spending and the impact of the Russian threat, showed a degree of unity without significant dissent.