Oral evidence: One-off session with the Secretary of State, HC 642

Oral evidence, 26 March 2024.

Witnesses

Grant Shapps MP, David Williams CB, Tom Wipperman and Lieutenant General Sir Rob Magowan KCB CBE.

Chair

It is a pleasure to have the Secretary of State for Defence and his team with us to give evidence to the Committee. Secretary of State, would you like to start by introducing the team who are with you today?

Grant Shapps

For sure. I am here with the permanent under-secretary; David, do you want to introduce yourself?

David Williams

David Williams, permanent secretary at the Ministry of Defence.

Tom Wipperman

Tom Wipperman, director for strategic finance at the Ministry of Defence.

Lt Gen Sir Rob Magowan

Lieutenant General Rob Magowan, Deputy Chief of the Defence Staff for military capability.

Chair

It is good to see you all. Kevan is going to kick us off with the first question.

Mr Jones

I think you would expect us to start with the Budget. Since the Budget on 6 March, there has been some uncertainty as to whether defence expenditure is rising or being cut next year. Here is an open question to start with: can you clarify what the position is?

Grant Shapps

I will kick off and then hand over to Tom. I think the confusion on the day is that when the Treasury publishes its numbers, you are not comparing apples with apples; you are comparing apples with oranges. It publishes the entirety of the out-turn of the previous year, ’23-24, including supplementaries, which includes things like Ukraine expenditure, for example. When you see the figures for ’24-25 on the day in the book, that does not include the supplementaries, even though everyone knows, because the Government have already committed to it, that that is £2.5 billion, for example, and then there is money for munitions—there is £280 million for the stockpiles. Once you add those two things in, you are then comparing the out-turn of last year to what will be the out-turn this year for certain. You get a 1.8% real-terms increase: £1.4 billion.

Mr Jones

Right, so what you are basically saying is that what is in the Red Book figures—

Grant Shapps

Is misleading, because it does not include a footnote that says, “That doesn’t include supplementals.”

Mr Jones

Let’s get clarity, then. Let’s do RDEL first. According to the Red Book, for ’22-23 it was £32.5 billion, for ’23-24 it was £35 billion, and for ’24-25 it is planned to be £32.8 billion. What are the figures, taking out what you have just said, for 2022, 2023 and 2024?

Grant Shapps

To compound those figures, you end up with £54.2 billion the previous year and £55.6 billion this year. But I know you want to get into the detail, so I am going to ask Tom to give you the actual numbers.

Mr Jones

No, I am deliberately doing it separately. I know in your tweets you have a tendency to—

Grant Shapps

Add CDEL and RDEL.

Mr Jones

Well, and conflate things that frankly don’t add up. But go on—carry on.

Tom Wipperman

Mr Jones, if you look at the ’23-24 number, that is our out-turn, which reflects the supplementary estimate published in February

Mr Jones

Got that.

Tom Wipperman

The RDEL, £35 billion, compares to plans—

Mr Jones

Can I just stop you? The Secretary of State has just said that the £32.5 billion has got the supplementary. I understand that. What is the figure, stripping that out? That is what we are trying to get to.

Tom Wipperman

Sorry, do you mean ’22-23?

Mr Jones

Let’s start with ’22-23.

Tom Wipperman

That is £32.5 billion. That is the out-turn from that year.

Mr Jones

And that includes what the Secretary of State has just said?

Tom Wipperman

Yes. The out-turn for ’22-23 includes the additional spend in that year.

Mr Jones

We have got all that. Strip that out, then, and what was the figure for ’22-23? What you are saying is that the supplementaries really skew things. As the Secretary of State has just said, you are not doing apples and oranges. What we really need to get to is stripping out all the supplementaries in 2022-23 to get a baseline, and then going on to 2023-24 to see what that is with everything stripped out. That is what we need.

Tom Wipperman

I do understand the question, but I would suggest, if I may, that we do it the other way round, starting with ’24-25. The reason for that is that the out-turns that you see reflect the things that went in, in that year.

Mr Jones

Sorry, but you do not need to explain that. We’ve got it. What we are trying to get to is what the baseline is, with all the supplementary things taken out. We want the baseline. The way you can tell whether it has increased or decreased is to take everything out from the figure for 2022-23, so that we just have the baseline, and then get the same figure with everything stripped out for 2023-24. Then, if you compare the two, you can see whether the figure has increased or decreased.

David Williams

If I may come in—Mr Wipperman may want to correct me—the number that we focus on or manage in the Department is our expectation of the Budget after supplementaries each year. The data that we then report, which I think we probably have to hand, is the out-turns for previous years, including those supplementaries. We can answer the question that you want, but it requires going back to the main estimates for each of those previous years.

Mr Jones

Hang on—wait a minute. We are talking about transparency with the public and Parliament. The Secretary of State and Mr Wipperman have just argued that it is increasing. According to the book, it is not increasing. This is what we need to know. What the Secretary of State has just said is that the only way to do it is really to strip out the supplementaries. That is where we need to get to, so why can you not produce those figures? No disrespect to you, but that is the only way we can tell whether what the Secretary of State and you are saying is correct.

David Williams

It is just that the matter of record for previous years is the audited figures from the NAO, which is the end-of-year out-turn that includes the supplementaries, so our proposal is that it is easier to compare ’24-25 with our expectation of what will be in the supplementary estimate, rather than the book figure. We could answer for the start point of each year, but that would be the figure approved by Parliament in the main estimates each year. It is not particularly a number that we plan against, because we expect it to change. I have not got the data with me.

Mr Jones

On these figures, it is going down.

Tom Wipperman

I do have a TDEL number, although I do not have the RDEL/CDEL split. These are nominal, so they are not adjusted. For ’22-23, the total budget—RDEL and CDEL combined—is £49.9 billion prior to reserve funding. In ’23-24, it’s £51.5 billion, and in ’24-25, it’s £51.6 billion[1]. Those are totals, so that is RDEL and CDEL prior to agreed reserve claims that took place during those years. Those are nominal, not real.

Chair

It’s nominal, so it is pre-inflation?

Tom Wipperman

Pre-inflation, yes.

Chair

So it’s £49.9 billion to £51.6 billion—are those the numbers, Tom?

Tom Wipperman

That’s right.

Chair

So that is probably a reduction in real terms.

Mr Jones

It is a reduction in real terms if you take account of inflation. What, within those figures that you have just given us, is not core expenditure? Does that include support to Ukraine, for example?

Tom Wipperman

No, that would not include support to Ukraine. That is all the reserve funding that comes in.

Mr Jones

I am trying to be helpful. I am just trying to get a clear picture.

David Williams

I think the point is that the main estimate figures tend to relate to core spending, as agreed in the spending review. They do not agree an uplift for Ukraine; they do not agree additional funding allocated to the Department in the autumn statement 2022 and the spring statement2023. It is a baseline that the Treasury uses, but when you are comparing year-on-year growth, out-turns to plans plus planned-for supplementaries is the best measure.

Mr Francois

Much of that comes from the contingency reserve, which has always been accounted for differently. You know as well as I do that this is all deliberate smoke and mirrors.

David Williams

No, it is not deliberate smoke and mirrors.

Mr Francois

It absolutely is.

David Williams

No, because the claim from the reserves comes through the defence budget in the end and is reported in our annual report and accounts. It is audited by the NAO. It is the authoritative figure on what we have said.

Mr Jones

It is, but there is a problem with that. It is interesting that when I was in the Department one of the things that the Conservatives always said was that you should take out, for example, the expenditure on Afghanistan and Iraq. Are we now saying that we should not have done that, and that the arguments that Mr Shapps and others were making at the time were wrong?

Grant Shapps

Look, if the argument is whether we should spend more on defence, the Government agree. We are committed to 2.5%. Not all sides of the House agree with that.

Mr Jones

Can I stop you there, because we will get to that later?

Grant Shapps

Okay, but it is in within this context.

Mr Jones

Hang on. We will get to that later. Other people have questions on that, so I don’t want to eat their sandwiches. I know you are very good at flannelling and making positive statements, but we need the detail. It is important that we as a Committee, and the public, get an understanding of the actual figures, rather than what you have put in a tweet, for example.

Grant Shapps

To be fair, though, you cannot take the out-turn of ’23-24 and somehow include supplementaries, and then compare it with the projection for ’24-25 and not include supplementaries. That is then you not being consistent. All I am doing is being consistent.

Mr Jones

No, you are not being consistent at all. I was trying to be fair with you to try to get an understanding, so that we can get to the bottom of what the claim is. To be fair to David, he has gone through that in terms of explaining how the out-turns have come around, which is fine. The figures that Mr Wipperman has just outlined are fine. I have a better understanding of what you are suggesting now.

Mr Francois

For people who are watching, we are talking about estimates, out-turns and supplementary estimates. Let’s just go right back to the basics. This is the Budget Red Book. This is the document that gives the detail—the small print, if you like—after a Budget. It lists the revenue spending for each of the Departments, their limits, known as RDEL, and their capital spending limits, known as CDEL. It lists each Department. Look at the RDEL list, which is table 2.1 on page 25 of the report, and take a comparison with education. The education budget for 2023-24 is £81.9 billion. For ’24-25, it is £84.9 billion, so it has gone up £3 billion. So far, so straightforward. When you do the same for the MoD core budget, it goes from £35 billion in ‘23-24 to £32.8 billion in ’24-25, the financial year that is just about to start. That is a cut of £2.2 billion in the core defence budget. When you do that for capital, it goes from £19.2 billion in ’23-24 to £18.9 billion in ’24-25, so that is another £300 million off. When you add the two, that is £2.5 billion. I am not a qualified accountant, but I was a shadow Treasury Minister under Osborne for three years in opposition, so I learned to read this document by application. The amount that we are giving to Ukraine next year is £2.5 billion, so it is almost exactly the same as the cut in next year’s core defence budget. That is always traditionally paid for out of the contingency reserve, just as we did with the Falklands war and most other conflicts. That has always been the way. If you compare apples and apples, the £2.5 billion that goes to Ukraine is not part of the UK defence budget, because you cannot spend the same pound twice. If you are spending it on shells for the Ukrainians—money well spent—you cannot spend it on Army salaries, submarine maintenance or new runways for the Air Force. You have suffered a massive defeat at the hands of the Treasury, you have had your budget cut by £2.5 billion, and you are now trying to play smoke and mirrors with the Ukrainian money to pretend that your budget has not been cut, when it has been slashed. Aren’t you, Secretary of State?

Grant Shapps

No.

Mr Francois

You absolutely are.

Grant Shapps

Let me answer. I disagree. Actually, the problem with the numbers you have read out is that they are in themselves misleading, because the previous—

Mr Francois

They are in the Budget Red Book. It is the official document of the Government.

Grant Shapps

Okay. However, give me a moment here. By the way, you and I start from the same place: we both want to spend more on defence. This Government are committed to spending more on defence, and I absolutely agree. The Government are committed to 2.5%, as conditions allow; other parties are committed only to 2%. None the less, the reason those numbers come out as misleading is simply that the previous year’s figures that you read include the supplemental, while the next year that you are reading does not include the supplemental. The argument is simple: you either have to include it entirely or you do not include it entirely, as Mr Jones was offering up previously. You cannot include it in one and then not include it in the other. If you do, the 2023 figure that you presented—which I think in your terms was £35 billion, or £54.2 billion if I look at the total TDEL—goes down as well. You would be arguing that the defence budget was reducing every year, including in past years as well. The only way to look at this is as the NAO looks at it in the audited accounts: it ends up including supplementals. That is not just the £2.5 billion, though that number would, as you have pointed out, conveniently suggest—[Interruption.] It is also Dreadnought; it is also stockpiles; it is also other operations.

Mr Francois

Secretary of State, if you want to draw on the NAO in evidence, according to its equipment plan report, which was recently reported on by the PAC, you have a black hole of £29 billion over the equipment plan.

Grant Shapps

Again, that is misleading, because—

Mr Francois

Oh, so the NAO and the PAC are wrong as well?

Grant Shapps

Yes, that is misleading. That equipment plan is £288.6 billion over a 10-year period, of which only 25% is committed. When the NAO looks at it, it assumes that we do not get to our 2.5% stated public position of defence expenditure, which this Government say we are committed to.

Chair

Mark, you can have one more question.

Mr Francois

Secretary of State, everyone can see what you have done: you have been defeated by the Treasury, you are slap-bang guilty of Enron accounting, and you are trying to blow smoke in everybody’s eyes by using Ukrainian money and pretending it is part of the UK defence budget. It is not; it is part of the Ukrainian defence budget.

Grant Shapps

But Mr Francois, you are doing exactly the same. You are using Ukrainian money from last year and including it in the budget, but then saying, “You cannot include it in this year’s budget,” and coming to misleading conclusions.

Mr Francois

No. These are what an accountant would call “accounting adjustments”. You have a total, there are some differences to the total, and you record why the two numbers are different, right? The Red Book barely mentions defence at all. We have a Chancellor who has no interest in defence—we all know that. Why, then, are these supplementals not footnoted in the Red Book? Why are last year’s supplementals not footnoted in the Red Book?

Grant Shapps

I will join you on the campaign to have them footnoted, but it cannot be right to claim the inclusion of other expenditure, including the supplementals for a range of different issues, in one year, and then look forward and say, “But we are not going to include them”—unless you think that we are not going to make those contributions beyond Ukraine, Dreadnought, other operations or the stockpile, all of which are already declared. In defence of the Chancellor, he himself has spoken about 4% in the past, so I do not think that he has no interest in defence.

Mr Francois

In simple pub English, you’re cheating.

Grant Shapps

No, I think it’s the other way around. I’m sorry, but I want to push back very strongly but respectfully on this, because you are deliberately quoting figures that include supplementals, and then not comparing apples with apples when we look at this year. We either have to do both or neither.

Chair

Secretary of State, I think we should now draw a line under this debate, but it illustrates one particular point, because we have discussed for eight minutes the historic numbers that you have presented. There is something wrong in the formulation if we are having that length of debate. Given that the message that we need to send to adversaries is one of confidence in the funding streams you are getting and all the rest of it, we clearly need to do better in presenting the numbers that you are receiving. I have just a couple of questions. The numbers that Mr Wipperman presented on TDEL would suggest a fall in real terms, I would have thought. I will leave that with you. The other major question is this: what matters is what you can plan for in terms of your budgeting; supplementals are great, but that depends on when they come during the course of the year and whether you can actually apply them to what you can budget for. Maybe you could write to us as to the thought process. I absolutely appreciate that these ones have already been announced subsequent to the spending round, but perhaps you could write to us when you are doing your planning and you know that you have that money guaranteed with the Treasury—so although Parliament still has to vote it, you will receive it—so that we know what forecasts you are working under in your planning. I think that would be logical.

David Williams

Yes, it would. We can write separately, but I would expect to set that out in our estimates memorandum for main estimates. I know we were, for technical reasons, a little late in sending you the supplementaries this year. The estimate memorandum for the supplementaries does set out the increase in the baseline for ’23-24. I am happy to set out what we are currently planning on in the main estimates memorandum, if that is the most convenient way, or we can set it out directly.

Mr Francois

How curious that you were late this year.

David Williams

Genuinely, it was an IT problem, Mr Francois.

Mr Francois

Of course it was.

Chair

Our concern is what budget you think you have to spend. We are all, 100%, in favour of 2.5%. Many would like it to be more—not only 2.5 in terms of percentage, but 2.5 in terms of Ukraine. Clearly, as Mr Francois says, that is not money that you could be spending necessarily on the UK. We are all hugely supportive of it, but we are trying to ensure that we know whether you have got an increasing amount of money into the budget in real terms.

David Williams

We can set that out. If it is some comfort, from the Red Book—or at least his remarks during the spring statement—the Chancellor says his expectation is that we will be spending 2.3% of GDP in ’24-25, which is not the number that is in the Red Book.

Chair

And that includes £2.5 billion for Ukraine.

David Williams

That includes Ukraine.

Chair

Which is 0.1% of GDP. Kevan and then Derek.

Mr Jones

It is interesting what the Secretary of State said about the NAO report, because that did not stop you in 2009, for example. The NAO equipment report said that, if there were a £6 billion black hole in the equipment budget then, £30 billion if it was flat cash for the next 10 years. That did not stop you as a party arguing then that it was a £36 billion black hole. I agree that it is how you read NAO reports, and not using them like the Conservative party did in 2010 to put something forward completely fictitious. Can I clarify one thing? I thank you, Mr Wipperman, for your figures there, because that clarifies it for me. As the Chairman said, it is a cut, isn’t it? The TDEL figures.

Tom Wipperman

Those nominal numbers probably are—

Mr Jones

A cut.

Tom Wipperman

A real cut.

Mr Jones

Yes. Thanks.

Derek Twigg

To follow on and try to enlighten myself in my confusion, given the various figures that have been bandied around, so that we can be clear for the record: Secretary of State, are you saying that, in real terms, defence spending is going up?

Grant Shapps

As long as you include the supplementals, this year the spending goes up by 1.8% in real terms or 2.6% in nominal terms. For people watching this, who are now completely confused, the simple question is this. Do you include things that came in last year and were included in the so-called Red Book, and then ignore them this year? Or do you include them? Once you include them this year, you end up spending £55.6 billion on defence.

David Williams

That—

Derek Twigg

Why do you think that—

Chair

Derek, Mr Williams wanted to add something there. Then you can come back, Derek.

David Williams

I was just going to say that that figure is based on us adding in for 2024-25 additions to the budget that have already been agreed and announced. It is not us having a punt on what we would quite like to see.

Chair

That is an important point, thank you. The bigger picture, Secretary of State, is getting to that 2.5%. You will be pleased to hear that I was quoting you to the Prime Minister in the Liaison Committee not long ago: your wise words about the necessity of getting to 2.5% and about “pre-war”. I didn’t mention your aspirations to go beyond 2.5%. Yet the Prime Minister did not commit to a time and date for the 2.5% and the uplift. Are you able to enlighten us now?

Grant Shapps

I am certain the Prime Minister would have told you an hour ago if that was going to be an announcement for today, but the Government are committed to 2.5%. In my view, as you know from my speech at Lancaster House in January, we are looking at a more dangerous world. I used that phrase about “moving from a post-war to pre-war world” to describe why I think the challenges are greater. I am in complete agreement that you have to pay for that defence. So exact timing, as we have said all along, is a matter for the Chancellor, and the Government have described it as being “as conditions allow”. I am Secretary of State for Defence, so obviously I urge for us to move to that position as quickly as possible. There will be other opportunities, including an election coming. Other parties are committed to only 2%, the NATO base, which is a cut of about £7 billion a year to the current defence spending picture.

Mr Jones

That’s not true, and you know it’s not true.

Grant Shapps

So 2% is about £7 billion less than we spend at the moment per annum.

Mr Jones

That’s just complete spin as usual.

Chair

Hang on, Kevan.

Mr Jones

It is. The bloke can’t lie straight in bed.

Grant Shapps

Well, there will be choices come a parliamentary election for different views of this—

Mr Jones

But you are cutting the defence commitment now.

Chair

Kevan, can you go through me please?

Mr Jones

You are cutting the defence budget now.

Grant Shapps

As we have just heard, it is a 1.8% real increase if you include all the supplementaries. You are not including—

Mr Jones

Go on the figures that Mr Wipperman gave rather than what you are spinning. I know it is difficult for you not to spin things as you would like them, but deal with facts.

Grant Shapps

Mr Jones, I’m sorry but we have had a long time on that. The facts are that, once you include the supplementals, we are spending more this year than we did last year. That is a fact.

Mr Jones

On things that aren’t necessarily core defence expenditure.

Grant Shapps

Well, I think Ukraine, for me is—

Chair

We have had enough debate on this. There are many other things that we can discuss other than the numbers. I said 10 minutes ago that we would only spend eight minutes on this, but we have now spent a quarter of an hour. Secretary of State, you can’t enlighten us on the timings, but you can say that this is an absolutely priority for you and I assume that has implications for manifestos and the like.

Grant Shapps

As I say, I am strongly committed and, as you have pointed out, discussed this well before I was Defence Secretary. I am very committed to making sure that we defend ourselves. When you do that, you make a very good case to your adversaries not to try it on, so I think it is cheaper in the long run to do that. I am very pleased that we are committed to doing it. Of course, I urge us to do that as quickly as possible. There is a general election coming up.

Derek Twigg

Can we talk about the facts and come back to the Budget earlier this month? Is it a fact that there was no additional money for defence?

Grant Shapps

This Budget didn’t announce additional lines of expense. However, because there have already been supplementals, including Ukraine and Dreadnought, the money still went up, but that is correct.

Derek Twigg

You referred to the facts, so it is correct that there was no additional money.

Grant Shapps

Yes.

Derek Twigg

Right. So given that you and Ministers, even yesterday on the Floor of the House, are now saying we are in a “pre-war” situation, what do you believe convinced the Chancellor and the Prime Minister not to put any additional money into the Budget for defence, given that we are in a “pre-war” situation?

Grant Shapps

Although there was no announcement specifically in the Budget, as I was just saying there was already money that had been pledged. A couple of months earlier, for example, there was an increase in defence spending in Ukraine. I hear what the Committee says—that is not core defence spending, I hear some people say. None the less, there is a war on in Europe. Frankly, I don’t really care whether the money comes in as a supplemental or—

Derek Twigg

Do you agree with the decision of the Chancellor and Prime Minister not to put additional money into the Budget for defence?

Grant Shapps

Look, I am Secretary of State—

Derek Twigg

I am asking you a simple question.

Grant Shapps

I am Secretary of State for Defence—

Derek Twigg

We know that.

Grant Shapps

I have been Secretary of State in many different Departments. By the way, I have always been pretty successful in getting the money in, whether it is for energy, transport infrastructure or what have you, and I intend to be successful in this role as well.

Derek Twigg

Do you agree with the Prime Minister and the Chancellor?

Grant Shapps

I also have collective responsibility, and that means that it is a whole Government Budget. I am very pleased; I actually am the—

Derek Twigg

Did you make representations for additional money to the Chancellor and to the Prime Minister?

Grant Shapps

It is widely known that of course I made representations. What kind of Secretary of State would not?

Derek Twigg

So you don’t agree with the Chancellor and the Prime Minister.

Grant Shapps

Because I am Secretary of State for Defence, I think that it should be a priority, of course.

Derek Twigg

So you made representations for additional money. The Chancellor and the Prime Minister rejected that.

Grant Shapps

Saying that they had already put more money in, and that is revealed in the 1.8%.

Derek Twigg

So why did you ask for more money?

Grant Shapps

Because, of course, every Secretary of State’s job is to lobby for their area.

Derek Twigg

Why specifically did you ask for more money?

Grant Shapps

Because every Secretary of State wants to get more money into their—

Derek Twigg

What is the reason why you asked for more money?

Grant Shapps

There are any number of things that I would like to spend the money on.

Derek Twigg

Enlighten the Committee. What was it in defence that you needed extra money for?

Grant Shapps

Well, I can through long lists. There is almost no programme that I wouldn’t want to enhance, improve.

Derek Twigg

Let’s take the top one, two or three programmes.

Grant Shapps

It is hard to give you an exact list, but there is almost nothing that I would not want to—

Derek Twigg

What specifically worried you that you needed to ask for extra money?

Grant Shapps

Because we are committed to going to 2.5%, I wanted to put forward the argument that—

Derek Twigg

That is not the question I am asking.

Grant Shapps

I know, but you are not even knowing the answer to a question before you—

Derek Twigg

Because you are not answering it.

Grant Shapps

I will try, if you let me. We are committed to going to 2.5%. Of course, as the Secretary of State for Defence, I argue that we should do that as soon as possible. Having been a Secretary of State in many different Departments now, I have always argued, often successfully. You do not win that every single time. The view of the Government on this occasion was that there was already more money due to come to defence. Indeed, although it is in a supplemental, we had already announced an increase on the Ukraine spending. If that had been done in the Budget, you would probably be telling me that there had been an increase, so it is a question partly of timing, but there are many different fiscal events, and the trajectory is in the right direction.

Derek Twigg

I think the general wants to come in. Just before that, what is it that made you feel that we have to get to 2.5% now? The Prime Minister did not agree with you.

Grant Shapps

I have made speeches about this. I believe that rather than going back to 2%, which is your party’s policy, we should go up to 2.5%.

Mr Jones

No, it’s not. Stop telling lies.

Chair

Order.

Derek Twigg

Chair, in fairness, that is not the situation, but let’s stick to the Government and their position. Basically, we have agreed that you asked for additional money. The Prime Minister and the Chancellor rejected it, so therefore you do not agree with the decision of the Prime Minister and the Chancellor to not put money in the Budget. General, you wanted to come in.

Grant Shapps

No, hold on. You put a point to me that I do not agree with. I agree with collective responsibility. Of course, every Secretary of State bids for more money. You do not always get that money. To then turn that around and say, “Well, therefore you don’t agree with the overall Budget,” defies the point of collective responsibility.

Derek Twigg

So what does not getting 2.5% now, or in fact 3%, mean in terms of defence? What does that cause us a problem with?

Grant Shapps

Right now, the good news is that we are able to cover all our NATO operations and do everything that I have ever wanted to do since I have come in—for example, sending troops to Kosovo, being active in the Red Sea, and providing increased support to Ukraine, all of which I have done, including Ukraine, because I have got a bit more money, although I know that there seems to be resistance to accepting that. The National Audit Office will agree with me at the end of the year that we spent more money. If we could come back in a year’s time, we could demonstrate the point.

Lt Gen Sir Rob Magowan

Mr Twigg, I think we are on record in this Committee declaring the sorts of things in addition to the programme of record that we wish to invest in. I think we have already answered what you are asking the Secretary of State. We have discussed the sorts of things. We can go through them again.

Derek Twigg

Did you go with the Secretary of State to the Prime Minister?

Lt Gen Sir Rob Magowan

Exactly as the Secretary of State said, we said, “We want additional resource. If we want to mitigate this level of operational risk, we will need more resource in these areas.” We can go through those areas again.

Derek Twigg

Just give us a quick few seconds, so we get it on the record again.

Lt Gen Sir Rob Magowan

We have been very clear that the amount of money that we are spending on munitions at the moment, which is significant, does not meet in all areas the threats that we face. We have been clear that we need to spend more money—above the programme of record—on what we call integrated air and missile defence. I could go on. We have said these things before. We have made it clear what we would spend additional money on if we were given it, but we work within the money that we have, and we carry the operational risk accordingly. That is what we are doing in ‘24-25. Against the Budget, the operational risk is at a certain level.

Derek Twigg

You clearly felt it important enough to go and ask for this additional money for those reasons.

Martin Docherty-Hughes

Secretary of State, let’s go back to the Public Accounts Committee report. The hon. Member for Hackney South and Shoreditch stated in her introductory remarks: “In an increasingly volatile world, the Ministry of Defence’s lack of a credible plan to deliver fully funded military capability as desired by Government leaves us in an alarming place. But this problem is not new. Year-on-year our Committee has seen budget overruns and delays in defence procurement. A lack of discipline in the MoD’s budgeting and approach has led to an inconsistent plan that just isn’t a reliable overview of the equipment programme’s affordability.” Do you recognise any truth in the Chair of the PAC’s introductory remarks?

Grant Shapps

I think it would be disingenuous to claim that procurement has been a consistent triumph in defence over many decades. That is one of the reasons why you will recall that—it was perhaps at my last appearance or the one before, when I first became Defence Secretary—I agreed that we should have a new system of procurement called the integrated procurement plan. Indeed, I offered your Committee the opportunity to be part of creating that. That was something that we launched last month in response to precisely those concerns.

Martin Docherty-Hughes

Just briefly, because I know that the Chair wants to bring others in, I want to ask about procurement and the processes through the Ministry. We will disagree, for example, on the nuclear deterrent, but our role today is to hold power to account in terms of how it manages that money. In terms of the nuclear budget for the coming decade, the report states that it is jumping from £38.2 billion in one year to more than £109 billion. How does that then impact on any additional spending on your conventional force, if you have inflation and also the issues around currency movements?

David Williams

The principal increase in the cost of the programme is linked to the deterrent, as you say. That is as a result of us doing a drains-up review of what we needed to ensure that we go through a decade of major recapitalisation with appropriate contingency and funding to make sure that we can deliver those critical programmes. I have good confidence in the central budget assumption that we used, as I think I explained to the Public Accounts Committee at the time, in terms of formal budgets for 2024-25, and that includes the supplementaries, but then we are into a spending review. The issues will be decided through that process. Indeed, over a ten-year horizon, there is always more than one spending review to go. The central budget assumption that we have used assumes that the nuclear programme is funded to a line that we have discussed and agreed with Treasury colleagues. Treasury assumptions about how the rest of the budget might grow are therefore conventional capabilities. That central assumption does not, as the Secretary of State has already said, plot a trajectory towards 2.5%, which is the Government’s position.

Martin Docherty-Hughes

Just finally, Chair, there is a rather insane rumour going around at the moment, which we have been hearing today, that a member of the Cabinet may have been involved in the unarmed Trident missile misfire—I think it was last month. I am wondering—

Grant Shapps

I can absolutely—

Martin Docherty-Hughes

You can refute it completely? No member of the Government was involved.

Grant Shapps

Although we do not discuss national security issues, I can absolutely guarantee you that it is completely untrue.

Martin Docherty-Hughes

Thank you.

Chair

That has settled that one.

Martin Docherty-Hughes

Yes.

Grant Shapps

It’s not one I have heard either, I should say.

Chair

You learn something new every time you come to the Committee, Secretary of State. I will bring in Gavin on military capability.

Gavin Robinson

Thank you very much, Chair. Secretary of State, good afternoon to you. There is some overlap in the questions that you have faced up until now, but I hope you will accept at the outset that none of the parties represented around this table present an electoral threat to me in Northern Ireland, and therefore I will not be electioneering in my questions. I hope you would also accept that it is not sufficient to simply outline that because you are the Secretary of State for Defence, you just naturally ask for more and will always want more. For a Member of Parliament like me and for colleagues around the table, the imperative is actually about defending our national sovereignty, our national defence, our readiness and our ability to respond to threats and prepare appropriately for them. That is not in the abstract. Hopefully you will accept that it is not about the abstract and that just because you are Secretary of State you ask for more. Actually, you should be asking specifically and purposefully for the capacity and capability that we require to defend our nation.

Grant Shapps

I agree entirely.

Gavin Robinson

Thank you. You were asked to give an example of the sort of things you were seeking additional funds for, but you have not done so. Do you wish to give an example of those now, over and above what the general said? I think it is important from a national perspective that you, as the Secretary of State for Defence, have the opportunity to indicate where you think there are financial frailties within your Department and what capacities you require and we require as a country for the future.

Grant Shapps

Well, a number have been mentioned. The reality is that there is a vast range of different things and future weapons that I would like to spend more time on, and inevitably, in the end, more money. It has always been thought through the decades that we fought with three different services—land, air and sea—but now we increasingly do much more in cyber, and a huge amount more is also required in space. We have more domains that we are fighting in, so there will be expansions there. We have talked about the replenishment because of our generosity in our gifting to Ukraine. This is a question of how much risk you want to carry at any one moment in time. That sits both within defence, because, as you rightly say, the first task and job of any Government is to defend the nation—by the way, we are the country with the second largest NATO budget, with a blip for Germany at the moment because they have a sum of money going through, but it is not in their baseline core at all. We do pull our weight when it comes to the NATO contribution, but I want to build systems that keep us safe for the future and, in particular, deter our enemies from trying it on. For all of those reasons, I can see where we would spend money, but I would say, I hope with the agreement of this Committee, that it is not just about how much money you have—£55.6 billion this year—but how you spend that money. That is why the integrated procurement model, the new plan to spend money in a much better way, is incredibly important. Lastly—and here, we have been able to do things—the nature of warfare is shifting and changing. Even in the six months that I have been in this job, in my visits to Ukraine I am seeing on the frontline, in the actual war situation, assumptions that would never have been the case six months ago. For example, Ukraine sinking large amounts of the Black Sea fleet without itself having a navy is changing the way that we look at warfare, as well. Drones, sea and air—those are all areas where I think there is a lot more room for new thinking in defence.

Gavin Robinson

Yes, but you will also accept that sometimes we are faced with a choice—or you are faced with a choice—that is constrained by an earlier decision made in different circumstances. I am the Member of Parliament for east Belfast, where NLAWs are made. We saw their incredible utility in the early months of 2022 and the renewed interest in that system, but recognised that through UK Defence, it was discontinued 10 years ago.

Grant Shapps

And we have seen lots of weapons that are not new—the Storm Shadow is another example like the NLAW, which is actually not a particularly modern missile but has been incredibly effective—but there are new generations of missiles and others coming along all the time.

Gavin Robinson

What opportunity have you as Defence Secretary taken, then, to reappraise decisions that were made prior to your appointment as Defence Secretary in the light of Ukraine and the full invasion of a country within our European territory? Have you reappraised to say, “Those were the wrong decisions to make”?

Grant Shapps

I will give you a couple of examples. Any navy that was thinking a year ago about both its own defence—as we have seen in the Red Sea—and its own attack was not thinking about the consequences of what has happened both in the Red Sea and in the Black Sea. We have seen an asymmetric level of warfare in both ways: drones at sea in the Black Sea and drones in air in the Red Sea, and the asymmetric nature of either sinking a Russian warship or firing expensive missiles like Sea Vipers at inexpensive drones. We are seeing an asymmetry that should make us all think about the way that we are doing things. I recently highlighted the work of DSTL with the DragonFire, for example, which has the potential for £10 a shot to take down a drone. How fast can we bring these things forward? What is the progress? Those are the types of differences in thinking that are going on right now.

Gavin Robinson

Mr Williams mentioned in his last answer that there is a forthcoming spending review, and we know that in 2021 there was a spending review that led to the reduction in scale or cancellation of a significant number of programmes. That was in 2021, in advance of Ukraine’s invasion, a resurgent Russia and threats from China, and you know the consequences. We got a list of the decisions taken from 2021 just last week, which included the cancellation of the Warrior infantry vehicles and the reduction of E-7 aircraft from five to three platforms—knowing what training, maintenance and so on is required, that is really very few for utility purposes. Have you gone through those decisions from 2021 to see whether the assumptions prior to the invasion of a sovereign country in Europe were right and whether they sustain today?

Grant Shapps

First of all, every Department has to cut its cloth at some point. Obviously, ’21 was well before my time. When I look through those programmes today, it is interesting that for quite a lot of them you would say, “Actually, I’m not sure that would be the right programme to pursue.” In the last couple of years during the war, and even in the last six months, there would be a whole batch of new things that you would want to do. We have turned on new programmes in areas—not all of which can be discussed in this forum—where there was not even an industry related to them going back a year or two. Inevitably, that list would be quite different.

Chair

Last question, Gavin.

Gavin Robinson

In what way would the list be quite different? What would be resurrected from cancelled state, or replaced to its enlarged—

Grant Shapps

Why don’t we hear a bit of expertise from someone who was actually there?

David Williams

I will have a go and then General Magowan may want to come in. Actually, I wasn’t there at the time, but the list I sent you is the down arrows from SR21. It was a set of down arrows in order to create financial headroom alongside a substantial increase in investment in defence.

Gavin Robinson

It is not just down arrows, though; it is cancellations.

David Williams

Yes, cancellations and deferrals—I get that, but it was a set of decisions to retire capabilities, many of which were coming towards the end of their service life, in order to create, with the additional investment in defence, headroom for investment in future capabilities. That was a deliberate risk judgment taken at the time about securing the future and taking risk in the short term. With the invasion of Ukraine, the short-term risk you are willing to take and when you want that future to arrive is a live question that we have been working through in our plans, and that is reflected in part in the snapshot in the equipment plan from last year. As the Secretary of State said, both the pace of technological change and the evolution of capability that we are seeing on the battlefield in Ukraine mean that rather than reprieving savings that we made in ’21, if there were more money available, we would want to invest in new capabilities that are appropriate to the way in which we want to fight in the future.

Gavin Robinson

Chair, I recognise that you have time constraints, but I think that some of the answers will require further exploration at a future date. Reducing aerial surveillance, reducing the platforms, retiring the E-3, changing the availability of investment in joint air-to-ground missiles and all the rest of it seems to jar quite considerably with the requirements that have been acknowledged.

Lt Gen Sir Rob Magowan

I want to try to reassure the Committee. First of all, we are absolutely observing what is going on in Ukraine, as everyone is, and we are applying the lessons from Ukraine, but we will not over-apply them. NATO is not fighting in Ukraine. NATO will fight in a different way because of a whole range of circumstances. Having said that, it is very easy to have a conversation about capability and to say, “We should not have deleted this then, because we need it now,” but we are having a more fundamental review for the Secretary of State over the next six months, and that is about how we will fight in the future and how we will structure ourselves to fight in the future. We will fight and deter in a very different way from before, because of the lessons that we are learning from Ukraine and other areas. That will very quickly lead us, through the summer, into a review next year of a range of capability choices associated with how we will fight and structure. I think it is too binary to just go down a list of kit to determine what we do or don’t need.

Gavin Robinson

It may be, and we shall see where the review goes, but I make the point that you are not the first individual in such a uniform and in such a seat in the Committee to talk to us about a fundamental review—cycle after cycle, year after year, new ways of doing more with less, relying on allies and losing sovereign capability. And what happens? Defence never wins.

Lt Gen Sir Rob Magowan

But this is different because we have a war in Europe—

Gavin Robinson

It’s always different.

Lt Gen Sir Rob Magowan

Since 1945—a war in Europe. We are shifting from a posture of campaigning and operating in certain regions of the world, to a deterring, warfighting posture. That is the most fundamental change in my career.

Gavin Robinson

I have been on this Committee for eight years, Chair, and we have seen five substantive reviews within Defence. On each and every occasion, the ability of our MoD and our services to respond to threats—their capacity, their size and their scale—is reduced.

Lt Gen Sir Rob Magowan

Well, we’ll see.

Chair

Gavin has put one side of the coin. The other side may well be that the Department has read thoroughly our report on readiness for war. The logic of that would be working out how we will fight in these scenarios, learning the lessons from Ukraine. Mr Williams’s point on timing—that maybe, in a pre-Ukraine environment, one would take a longer timeframe to get state-of-the-art technology in, and perhaps one has to take decisions on timing—was another interesting theme for us to pick up on. So two very interesting points have come out of that discussion for us to pick up on. On Ukraine, Richard, I think you are going to take us forward on kit.

Richard Drax

I am. Good afternoon to you all. Secretary of State, do you agree that Ukraine cannot fall?

Grant Shapps

Yes.

Richard Drax

The UK is leading and has led with equipment and help, and we should be proud of that. Do you think the West is doing sufficient to give Ukraine enough armour and so forth to keep the Russians at bay and one day take their country back?

Grant Shapps

I think it is insufficient.

Richard Drax

Is there more we could do? For example, a vehicle I am very familiar with—others probably are, too—is the Warrior, which is being retired. Hundreds have already been retired. We have 625, I understand. Has there been any consideration to give some of them to Ukraine?

Grant Shapps

Look, to give a slightly longer version, I do think we need to do more. It is unthinkable that we would lose this war to Putin. I think we easily have the facility and capability not to lose the war, but it requires everyone to lean their shoulders into it. I was in Ukraine a couple of weeks ago having exactly this conversation with Zelensky. The catastrophic outcome of losing the war would be far more expensive than ensuring that Ukraine is in a position to win it. With that frame in mind, I am, again, looking through all our stocks, including things that could be retired—two years on, things have moved on again—to have another scrub through the inventory. But more to the point, because we have been incredibly generous in our gifting, I am also working with and on our partners, of which there are 52 countries in the Ukraine Defence Contact Group, to make sure they are also really digging deep to ensure that they assist. I look at our contribution in all things—including areas like long-range missiles, but in many other areas as well—to make sure that we are not an outlier, while others are not giving as much. Those things are very important.

Richard Drax

We are playing our part, Secretary of State, there is no doubt, but if they are going to win this war, there is no doubt that they need an awful lot more kit. Billions of dollars-worth of support is stuck in America. Can you update the Committee on where that is? Is it going to be forthcoming soon?

Grant Shapps

Anyone who can second-guess Congress in that manner would be a good person to have address you. It is not me, but I—

Richard Drax

I am sorry to interrupt you. I assume you ring your opposite number in the United States and say, “Come on, this is absolutely crucial.” Because, as you said, the cost of protecting the eastern border if Ukraine falls would amount to hundreds of billions a year.

Grant Shapps

My opposite number, Lloyd Austin, would entirely agree with that. It is stuck in Congress and specifically in the House, and for all manner of complicated internal reasons has not come out the other side. It is therefore prudent for the rest of the world—and I don’t mean just the West here. For example, I was in Australia last week and they feel very much the same way, because they understand that the read-across from a loss to Putin would be that an autocrat elsewhere in the world might think of taking other territories. Of the 52 countries in the Ukraine Defence Contact Group, one is the United States. That still leaves 51 of us, and I think that the UK is in a natural place to show leadership in order to make sure that the coalition of the willing, which includes the US as an Administration, but not as a Congress at the moment, step up.

Richard Drax

How many of those 51 are actually willing? There is a lot of talk, but not necessarily a lot of action. How often do you meet—perhaps virtually—to say, “What does Ukraine need? They need this. For heaven’s sake, let’s give it to them”?

Grant Shapps

It is a monthly meeting of the UDCG.

Richard Drax

And with every month that passes, thousands more die, because they are desperately short of shells and armoured vehicles and they don’t have the manpower that Russia—

Grant Shapps

That is at Defence Secretary level, but below that are other forums, for example JEF, the Joint Expeditionary Force. I had a meeting with them the week before last about what more we can be doing to support Ukraine and how we can integrate them more into our work, which is work in progress. So there are many, many different ways. The picture—just for the Committee’s interest—is not a straightforward one. There are huge challenges on the eastern front, as the Committee will know, and that is a matter of making sure that Western munitions, in particular, get through. But in the Black Sea, almost the opposite is the case. Six months ago, the Black Sea fleet sailed freely around the Black Sea, Putin had pulled out of the Black Sea grain initiative, and nothing was being exported. Six months later, not a single Russian Black Sea fleet ship is sailing at sea in the Black Sea. It is an extraordinary outcome, with Ukraine now exporting nearly as much as they did back before the war.

Richard Drax

This is all very good news, but the Russians are still making progress, albeit very slowly.

Grant Shapps

My point is that they are making progress in one area and falling back in another area.

Richard Drax

Yes, but you don’t need a ship to take land. The infantry do that, as you well know. The fact that ships are holed up is very good news, I accept, but the Russian troops are still advancing into Ukraine.

Grant Shapps

There is a slightly wider point I am making, which is that it has enabled Ukraine, and particularly Deputy Prime Minister Kubrakov, to get exports going again at a level that is helping them to fund their own economy and to fund weapons. So there is a broader point to that.

Richard Drax

Right, thank you.

Jesse Norman

Secretary of State, you said something I thought was very significant, which is, “There is no way we can lose this war to Putin.” Saying there is no way “we” can lose this war to Putin I think absolutely rightly aligns directly our interest as a country and as part of Europe with what the Ukrainians are doing. Of course, it underlines a further point you made, which is that there is a connectivity between each of these conflicts, because resolution, resolve and effectiveness are all being calibrated and measured across the different theatres of war and therefore there is a tremendous signalling effect. If we fall short in one, other adversaries can take comfort—possibly wrongly—from signalling. That is why the budget issue we discussed earlier is so important. I suppose this question is more for David Williams than for you, Secretary of State, but you must come in if you want. Given that Mr Wipperman has already said that the core planning budget has fallen in real terms—although the top-up, supplementary budget has grown in real terms—has your planning capability, where Mr Robinson has highlighted deficiencies or potential deficiencies in the past, been affected by the real-terms reduction in funding? Because that’s your planning budget, right? That is your core budget.

David Williams

Without wanting to get back to the first 18 minutes of the hearing, when you add in the announcements that the Government has made through various fiscal events—

Jesse Norman

We know this, but that is not the core planning budget. Sorry, I don’t want to go back to this, but has the core planning budget reduction affected your ability to do core planning?

David Williams

No.

Jesse Norman

Okay. That is all I wanted to ask—thank you. Is the fundamental review that General Magowan mentioned going to take account of the five previous reviews that we have discussed in this conversation, and learn the lessons for how it can be effective as a piece of internal negotiation, as well as a process of deep reflection on our capability?

Lt Gen Sir Rob Magowan

Of course, and there are people in the Department who have that knowledge as well. We will pull on that and all those reviews to ensure that we do learn the lessons that Mr Robinson was talking about. But this will be a new review, we hope, and it has to be set against the current strategic context, which is different from the previous ones. We will, of course, look at the mistakes we have made and the successes we have had in the past.

Jesse Norman

Obviously, the deep worry is that changes in technology, in particular, render some approaches to war overall potentially unviable—and if not now, then over a five, 10 or 15-year planning horizon.

Lt Gen Sir Rob Magowan

Indeed, and that is why, when the Minister for Defence Procurement, James Cartlidge, introduced the integrated procurement model, he made the point really clear on the Floor of the House about this so-called spiral development, which will be inherent in the IPM, which means that a certain percentage of the funding for capability X will be set aside to ensure that it can meet exactly what you have just said. The battlespace in Ukraine is changing every week, let alone every year. That is one of the key lessons: we need to have enough flexibility in our budget; enough of it is not only uncommitted, but committed in a spiral way to a particular capability to ensure that we can keep up with the technological change.

Jesse Norman

So, just to be clear, part of the effect is not just that you get much more rapid generational turnover in the way that a particular programme is moved forward, but you have a reserve that can act as a resilience pool against future technological change. Is that right?

Lt Gen Sir Rob Magowan

Yes, absolutely, and to be more agile and to be faster, and there are a number of ways of doing that. If I were allowed to say one thing, it is a much closer relationship with industry—literally sitting beside industry—to ensure that it can respond in the agile way that we need to in the future. That is a change.

Jesse Norman

Okay, that is very helpful. Can we now go to Ukraine? We’ve already heard discussion of asymmetric war from the Secretary of State, and we’ve heard discussion of drones—air to sea. Can you just highlight what you think have proven to be the three or four leading technologies where we have been able to support the Ukrainians?

Lt Gen Sir Rob Magowan

Without getting too technical—well, we can go as deep as you wish—I will say three things off the top of my head. Actually, this is not off the top of my head; this is driving the review that we have just been talking about. What we are seeing playing out in Ukraine, and what we think will play out in future battlefields and battlespaces, is this so-called sensor-to-shooter environment, where you have these sensors forward—you have a lot more sensors, and there tend to be uncrewed sensors. You then have the shooters out of the battlespace—out of harm’s way, protected—who can then prosecute their fires through this forward screen. That involves a very strong reconnaissance architecture and very long-range precision fires, but also a command and control architecture to knit that together. I will focus on that particular one, although there are three or four others we could talk about. That is quite a shift in the way we are going to fight in the future. We are seeing Ukraine and Russia learning that very fast.

Jesse Norman

Quite. Let us contrast it with the Bosnia conflict—another war in Europe—which was not, in some sense, an imperialistic war from an adversary we’d been fighting directly, at least in the cold war. This is that. They are rapidly evolving their forms of warfare, and we are doing the same. The nature of the electronic engagement that is being made is rapidly changing as a result.

Lt Gen Sir Rob Magowan

Yes. I think Bosnia is quite a useful case, in that we are not going to fight Ukraine again, and we are not going to fight Bosnia again. It is finding the themes. Many people are charged with trying to refocus on the last war; the clever bit is to identify which are the themes within Ukraine, or Bosnia, that we take forward to the future, and not replicate precisely what is happening, because it will not happen in the same way again.

Jesse Norman

Yes—sorry, Secretary of State.

Grant Shapps

I was just going to make a simple observation and projection, which is that this is probably the first true drone war. I do not think we will ever see a war again that doesn’t heavily involve drones.

Jesse Norman

Yes. We might, but not in a planning horizon, and not in a generational horizon—I agree. I will pick that up, and then I will wind up. When we think about the way in which the theatre is changing the battlefield and the wider strategic challenges changing in Ukraine, what are the kinds of trade-offs that you are seeing in your own procurement of existing equipment that will need to change in order to shift resources into that newly thematic electronic war that you are talking about?

Lt Gen Sir Rob Magowan

We have tried to go here before, and it is difficult to have those conversations for a number of reasons. I have been really clear that we will make those hard choices. We will have to make those hard choices against the budget that we are given, whatever that is, to ensure that we can meet the drone battlespace of the future. There are two reasons why I cannot say what those trade-offs are: commercially, it would not be appropriate to say that here, and this is an open environment; and you would not expect me to declare where I am going to take operational risk in the future.

Jesse Norman

Okay. That is extremely helpful.

Chair

Martin, you were very keen to come in on Ukraine, as was Mark, and then we will move on.

Martin Docherty-Hughes

Secretary of State, it is increasingly clear that, in the necessity for Ukraine to defend itself against Russian aggression, it is not necessarily a lack of formidability, the need for modernisation or some sense of new technological enterprise. What they require—what they keep telling us—is an old-fashioned triptych of more people, more ammunition and more time. I wonder whether you would agree.

Grant Shapps

Half and half, actually, in reality, because, yes, they need a lot more 155 and other calibre ammunition. Yes, they need more people; they do not have endless supplies of people and their country is not as populous as Russia. But they also need to play the asymmetric advantage—we had that conversation about the Black Sea—or the way that drones are being used. Drones are interesting, in as much as they belie the usual facts of war. Usually, every generation, it gets more expensive to have lethal effect, but drones, which sometimes cost a few thousand pounds, can be extremely lethal. You have seen that being used in this war. We have recently given £325 million for drones. If that were being given for missiles, it would not buy a lot of missiles. It will be a huge number of drones. Technological advantage is part of it, but, yes, basic warfare, munitions and traditional stuff are also incredibly important.

Martin Docherty-Hughes

Briefly, we do not want to go into the drones at the moment; it would be good if we had more time for it, but we cannot. I know there is a concern around the glider drones specifically. There might be an issue that the Russian Federation is getting access to Western technology to help them. We will maybe come back to that later. Specifically in terms of ammunition, I wonder whether you can advise the Committee on the Czech Republic’s artillery shell shortage programme. A substantial number of NATO allies are investing in that programme, which would allow round about 800,000 identified stockpiles across Africa and Asia. The Russian Federation is firing round about 10,000 shells a day; Ukraine’s return is only 2,000 at the moment. Is your Department investing in that programme?

Grant Shapps

We work through what is called Kindred, which is our programme to obtain and to provide things such as munitions. What we are doing actually is—

Martin Docherty-Hughes

So it isn’t that specific programme?

Grant Shapps

No. We are co-ordinating to make sure that we do not compete with that programme, but we already provide a lot of munitions through international purchase doing something very similar.

Chair

Secretary of State, to state the obvious, some of the stuff about lowering the cost of lethal munitions clearly has an impact on non-state actors and their access to those, which we are seeing in real time. Mark, you wanted to come in.

Mr Francois

General, a few minutes ago, you announced something really very important, I think. You talked about a review that is ongoing within the Department. Just for clarity, I take it you do not mean a complete defence review in the classic model, but how would you characterise it? Is this, if you like, a review of our warfighting capability specifically? Is that fair?

Lt Gen Sir Rob Magowan

Yes, it is called the future force design review. It has three elements: how we are going to fight, how we will structure ourselves to fight, and what our capability choices will be. That will form the golden thread of the military capability advice to the Secretary of State as part of a review, if we have one next year.

Mr Francois

Okay, so in the way of the MoD, that will now be the FFDR.

Lt Gen Sir Rob Magowan

Correct.

Mr Francois

Which Minister has day-to-day charge? It cannot be Heappey; he has just resigned on a point of honour over the cuts. So which Minister has day-to-day responsibility?

Lt Gen Sir Rob Magowan

I talk about it day to day with the Minister for Defence Procurement.

Mr Francois

So it is MinDP who has the lead on it?

Lt Gen Sir Rob Magowan

Indeed.

Mr Francois

Okay, because he buys the kit.

Lt Gen Sir Rob Magowan

Indeed.

Mr Francois

That is very helpful. Thank you.

Mrs Lewell-Buck

Afternoon all. Even though we were significantly hampered in our recent readiness report by the Department, what we did conclude, quite bluntly, is that we are not ready for war. We do not have the kit or the personnel to be ready. Secretary of State, in November you told us that retention and recruitment was an area of concern for you, yet we are continuing to lose personnel faster than we can recruit. Have you yet seen the implementation plan for Haythornthwaite?

Grant Shapps

I do maintain that this is one of the biggest areas of concern. You are absolutely right to highlight it. I will perhaps ask others to speak to the specific plan, but what I can tell you is that we are seeing a big increase in interest and applications. I know that that is not the end of the story, but just to put it on record, there was a six-year high in Army applications in January. I have just got the February figures and they are at a six-year high as well.

Mrs Lewell-Buck

Sorry, Secretary of State, but have you seen the implementation plan? You told us that this is a priority for you.

Grant Shapps

That is right. I have seen the implementation plan being worked up. I am not yet happy with all elements of it, so we are carrying on work on it. David may want to add more.

Mrs Lewell-Buck

I was going to ask David a question, because David told the Committee that the plan would be with Ministers before Christmas last year. It has taken from Christmas last year for you, Secretary of State, to now say that you are not happy with that implementation plan. That is quite a long time, considering that you said this is a concern and something you want to look at at pace.

David Williams

I will make two observations, if I may. First, against the immediate pressures around recruitment, the Haythornthwaite review and the recommendations it made are relevant and part of the answer, but I do not think they are sufficient. One of the things that the Secretary of State has asked about and the ministerial team has been getting from the people area of the Department is a shorter-term focus on what immediate steps we need to take to recover on recruitment. There is a 12 or 13-step approach that the team is working on. On Haythornthwaite and the approach we are taking to implementation, “pilot” is really the wrong word. I think of it more as an early adopter, to work through 2024 on a particular cohort around engineering personnel—that is around 10,000 people in the Armed Forces—looking at themes from the Haythornthwaite review around total reward, spectrum of service and the skills framework, and putting those recommendations into practice with a specific cohort before broadening out.

Mrs Lewell-Buck

Can I just be clear on this? Nothing from the implementation plan has been implemented yet. The review was in June 2023, and the implementation plan was before Christmas, but nothing has been implemented around recruitment and retention from the implementation plan.

David Williams

No, that is not fair. A range of activity is going on.

Mrs Lewell-Buck

Can you give us an example?

David Williams

We have been looking quite hard as part of our evidence to the pay review bodies at the place of financial retention incentives against core pay and specialist pay—so getting into that total reward space. I think the point is that a full-scale implementation of the Haythornthwaite review is generally not a quick thing. It is a multi-year endeavour. While we get after that, there is a bunch of stuff we want to do, because frankly the challenges around recruitment cannot wait that long.

Grant Shapps

Shall I have a go at this as well? As I said to you before, this is massively concerning me. Before other Members mention it, I accept that just because there have been applications at record high levels compared to many years, it does not mean that they come through. One of the things that frustrates me about the system is that you can apply, but actually getting into the Armed Forces through the system is painful. I have been having regular meetings with the Chief of Defence People, and he is working on 13 themes along with MinDPF, as he is now called—it has recently changed name. He and I have been working very hard to drive those changes. I have spoken about and already started to enact quite a lot of those changes. For example, I was recently up at Catterick. I was talking to the person responsible for Army recruitment, who was telling me that it is ridiculous that, once you have applied, you will be invited for an interview, and that interview takes place in a different location from the location for your medical. We are bringing that together. I do not need to produce a report to do; we are just doing it. I know this can be a bit controversial, and I don’t personally have a beard, but I have spoken before about the fact that 54% of men between 18 and 30 do, so we immediately exclude large numbers of people from most of the Army, for example. There are many other things that I am able to move on and change without needing to produce a final report. To answer your question, I do not rush to publish something until I am happy with the process.

Mrs Lewell-Buck

To cut to the chase, when will we actually see any of that plan coming to fruition? What timeline does the Department have for when you will start to see changes?

Grant Shapps

To actually publish it as a formal piece of work, rather than just doing the work?

Mrs Lewell-Buck

No, to actually see the changes that you are talking about. When will we see them?

Grant Shapps

Presently. As I say, I have been focused more on trying to get the change in the system than on publishing a report about it, but I think we can undertake to publish that fairly soon.

Mrs Lewell-Buck

I am curious as to whether anyone can help me out here. I have been sent a recent FOI that shows that over 125,000 applicants have been rejected from the Army, including 23,000 from the Commonwealth. They were turned down because of a lack of vacancies. Is that correct?

Grant Shapps

I have not seen that FOI, but I—

Mrs Lewell-Buck

That is what the Department’s own FOI says: a lack of vacancies was why they were turned down.

Grant Shapps

I have not seen that actual one, but I know that in the Army there are something like 73 different routes that you apply for—or, rather, different professions that you can apply into. I do not know whether that is because some are full; I have not seen that FOI. I have seen any number of examples of what I think are crazy practices for recruiting people in a modern world, and this is a very strong focus for me. I completely accept, particularly because there seem to be such high levels of interest, that the fact that we cannot get them through the system is a real and genuine problem that needs resolving.

Lt Gen Sir Rob Magowan

May I challenge your very first sentence, just for the record? I have absolutely read your report, and I think we are going to enact many of those recommendations. But on “not yet ready for war”, we are ready for war, and I fundamentally believe that. There will be a road to war—

Mrs Lewell-Buck

That is not what we concluded, though, and that was based on the scant information that we actually got. Nobody could explain to us why information that was previously publicly available was now classified, so we could only assume that that was because it was far worse than we thought. You may disagree, but that is what we found as a Committee.

Lt Gen Sir Rob Magowan

From my military capability perspective, I think your report is exceptionally useful, but the message that this country is not ready for war is the wrong message, on a whole range of fronts. We have very high readiness forces, many in the colour of my uniform, who can go out of the door tonight. We will then have a road to war. We would fight as an alliance. As we discussed before, it is about the balance of operational risk. That is the answer: not that we are not ready for war, but that we are ready for war.

Mrs Lewell-Buck

We will have to disagree.

Mr Francois

I want to follow directly on from that, before we come to personnel. General, there are six former MoD Ministers on this Committee and some other people who serve, so we vaguely know what we are talking about. We spent months looking at this. The MoD was very reluctant to release a lot of sensitive information. If you are right and we are ready for war—and I hope you are—then we are not ready for an enduring war. Do you accept that?

Lt Gen Sir Rob Magowan

Absolutely.

Mr Francois

We go into this in chapter and verse, but in a nutshell, for brevity, Sir, the problem is that we could not fight an enduring war for more than a couple of months against Russia—let’s drop all the euphemisms about “peer adversaries”. We could not fight Putin for more than a couple of months in a full-on shooting war, because we do not have the ammunition or the reserves of equipment to do it. That’s true, isn’t it?

Lt Gen Sir Rob Magowan

True.

Mr Francois

Thank you for your candour. Clearly, we need to do something about that—hence our great concern about the Budget, but I think we have made that point already. To give credit where it’s due, the force design review sounds good; it is very much along the lines of our report. If we are now looking—perhaps because of this but for other reasons, too—at how we can increase our actual war fighting power, that has to be a good thing. When will the FFDR conclude? When do we aim to have the outcome of that?

Lt Gen Sir Rob Magowan

We have an outline now. It is obviously at classified level. I do not know what sort of negotiation we could have. We could have a closed session on where we have got to on that. That will mature. The key point is that it must be ready, assuming we have a review next year or at the end of this year, whenever it is. We have to inform that from a military capability perspective and an operational force design capability choice perspective. That must inform that so that whenever that is, it will be ready.

Mr Francois

General—I am looking at the Chair, at the risk of speaking for the Committee—given the tremendous amount of work that we and, for the record, our excellent Clerks put into this report, I think we would very much welcome a private briefing if this exercise is complete or near complete. I am sure the Committee would very much like to be briefed on confidential terms about what that is, and maybe we could sort that out. Secretary of State, is that reasonable?

Grant Shapps

That sounds like a very good idea. I am happy to facilitate that for you. I just want to make one small point. With six former MoD Ministers and lots of professional expertise here, this is taken as a given in this room, but for people watching and hearing that the UK is not ready for war exclusively with Russia it is important to understand that, because we are in NATO and article 5 exists, we would never be in that situation. In fact, if we were in a war against Russia, NATO has four times as many tanks, three times as many subs, four times as many helicopters, six times as many armoured vehicles, four and a half times as many warships, eight times as many transport aircraft, four times as many artillery fires, 16 times the aircraft carriers and three times as many fighters. In other words, we would be in a very strong position. It is very improbable, very unlikely, that the UK would pick a war with Russia and not have NATO at our side.

Mr Francois

In 1940, the French army was far larger than the German one. Anyway, let’s come on to recruitment. To take you back to Defence questions of only yesterday, I quoted to you in the Chamber, or to MinAF, an article that the defence editor of The Times wrote on 22 March. She wrote: “Grant Shapps, the defence secretary, has admitted that the recruitment system is ‘ludicrous’, saying earlier this month that the ‘Amazon’ generation, which is used to getting things instantly, were not prepared to wait a year to join the army.” Is that an accurate reflection of your position?

Grant Shapps

Yes.

Mr Francois

Good. Larisa is a good journalist. I didn’t think she would get it wrong. If it is ludicrous—I think the Committee would absolutely agree with that—why is the outsourced contractor, whom the Chairman has asked me to call Capita today, still on contract? Why, if it is ludicrous, have you not bitten the bullet, got rid of them and taken it back in-house? “Ludicrous” is your word.

Grant Shapps

My reason for “ludicrous” is not to do with the contractor, although I know you have made many representations. The strict answer is that they are under contract, extended for a year or whatever. They have been on a rolling contract for many years. My complaint is not specifically, although I am sure there are many issues there, with just the contractor. It is that the rules that we apply—we started to get into some of them before—mean that people who would quite clearly be assets to our Armed Forces are often not allowed into our Armed Forces. It starts with trivial things like facial hair and goes right through to whether in 40 years’ time you might have a genetic disease, which suggests that the actuaries say you would not be able to fight.

Mr Francois

So if you had asthma when you were three—

Grant Shapps

Whereas most people serve for 10 years or something. We have to get real with the rules. When I say it is ludicrous, I think the way that we are doing this is almost designed to put people through an assault course that is about everything apart from their ability to—

Mr Francois

Secretary of State, I think we are in what the Americans would call “violent agreement”. For brevity, given what the general has just said, in our report, “Ready for War?”, page 31, para 75 states: “The MOD publicly concedes that for every eight service personnel who leaves, it currently recruits five people, although we understand the situation may have deteriorated further.” We understand that in some parts of the Army, for every one that Capita somehow managed to recruit, three are now leaving. We are particularly losing trained specialists to industry, where they can earn far more. Without the avionics technicians, planes don’t fly. Without nuclear watchkeepers, submarines don’t go to sea—and so on and so forth. It is really serious. The Armed Forces are bleeding out on the operating table. I use that language deliberately, based on fact. A few tweaks aren’t going to cut it. What this needs is for you, Sir, to cut the Gordian knot and do something very different from what we are doing at the moment, especially in the Army, where the challenge is greatest. You have got your headline—what are you now going to do?

Grant Shapps

Haythornthwaite proposed 67 or maybe 69 different pieces of action—or different themes, I should say—and we are working through—

Mr Francois

Haythornthwaite won’t touch the sides. They are leaving now.

Grant Shapps

In fairness, you have to start somewhere with these things. He has a whole bunch of different things that were putting people off either joining or staying. CDP, which you recommended to me—

Mr Francois

If you wanted to put that in the public domain, yes, I did.

Grant Shapps

It’s right there. You told me it was excellent, and I found you to be entirely accurate. CDP is working day in, day out on this, as are MinDPF and I, because I stand by my words. I think a system that makes it troublesome for people to get in isn’t in tune with the modern world. It takes far too long: people get offered other things and go elsewhere. Fundamentally—this is the issue—it is a very tight labour market, with low unemployment, which means that people have a lot more options. Things like the 9% pay rise last year will have helped, and when I looked at why the applications are up, part of the reason is the pay is up.

Mr Francois

Secretary of State, sorry, can we just dispense with this sophistry? Capita are past masters at manipulating statistics. When you say that applications are up, or expressions of interest, that is not the same as enlistments. The whole problem on this contract for years is that lots more people go on the website, click, say they are interested, maybe go through the application process, but very few of them actually take the King’s shilling. I have seen Ministers constantly talking about applications being up, but enlistments are down. What matters is enlistments. It is when people join, not when they watch a video. Please stop blowing smoke at us over that. We know the truth.

Grant Shapps

Look, I don’t disagree with the difference between a click to apply and someone enlisting, so you are absolutely right about that, but it can’t have been the case that in the past six years, a Defence Minister has come here and said that the Army applications are at a six-year high, because they are at six, or eight years with the Navy. So, we are seeing a much higher level of application. I absolutely share your concern about getting it right through the system. The problem might well be related to the contractor, but my point is, if we think that is the only problem, then we are barking up the wrong tree, because there are many other things as well.

Mr Francois

No, one more go—