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King’s Speech

My Lords, I welcome the opportunity to contribute to the debate today. Before I start, I congratulate the Government on the announcements today on the Gulf free trade agreement. This agreement has been a long time coming and it has been an extremely difficult negotiation. It is absolutely fantastic that it has now been agreed with the six separate nations of the GCC. I declare my personal interests in this as set out in the register, in particular as co-chairman of the UAE-UK Business Council, which has among its members many billions of pounds of investments both ways. This agreement, if it has the clauses that we all hope it does on investor confidence and investor protection, will enable even bigger investments to flow, which will be exciting, particularly at these times. It will also make an enormous difference to the £25 billion of bilateral trade between the UK and the UAE.

I hope that this is just the beginning and that what will follow will be a bilateral agreement to pick up the other areas that are not covered in the free trade agreement that will be negotiated by some of the Gulf states with other nations. Those agreements will give us a lot more in the two key areas of professional qualifications and data.

I move on to talk about defence, the issue I particularly want to talk about. I fear that we are not moving at the pace and with the urgency required—this has been said by so many people today. I therefore welcome the Government’s stated ambition to increase defence spending, but I am afraid that the proposals are simply not enough. The strategic global challenges and real threats faced by the United Kingdom today require increasing our national defence and security spending, as has already been said, to somewhere in the region of 5% to 7% of GDP. Once upon a time, those figures would have sounded excessive, but not today. NATO, for example, has already moved towards a 5% framework.

I applaud the fact that, across Europe, we are now starting to see European nations take far greater responsibility for their own security. The American view that Europe must increase defence spending and become less reliant on America underpinning security will not disappear. This is now a structural fact of the American political psyche, which far transcends the current presidency. Yet we are far behind where we need to be. It is regrettable that our Armed Forces lack the equipment, industrial backing and procurement

speed required for the changing nature and character of war today. We cannot meet the peacetime demands with our current innovation-blocking systems of defence procurement and regulations that are simply not fit for the industrial requirements of the 21st century.

That brings me to the situation in Ukraine, from which we must learn. Last Thursday’s missile attack on Kyiv, which killed 24 and injured many more, is a painful reminder of why our resolve towards Ukraine must not falter. We should be clear that, despite Russian disinformation, the economic pressure of sanctions placed on Russia by the United Kingdom and our allies is being felt. These sanctions, have constrained Russia’s access to capital, weakened its supply chains and supressed its ability to innovate. At the same time, Ukraine’s extraordinary innovation on the battlefield has shown the world how a determined nation, with the right support, can inflict damning blows on the war machine of a much larger aggressor.

Back home, with our stubbornly stagnant economic growth, does the Minister agree that there is a key opportunity to—