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News, gossip and insight from PoliticsHome Editor Paul Waugh

Bombnishambles or Whitehall Poker?

 

The twists and turns over the Government's post-2015 spending plans for the MoD have left MPs, officials and even hacks confused over the past 24 hours.

The PM made clear in Algeria that he does not 'resile' from (lovely Westminster word that) his pledge to increase defence spending in real terms year on year.

Clearly spooked by the morning papers and TV coverage, the Treasury then made crystal clear that no decisions have been made about the 2015/16 spending review.

Then up popped Philip Hammond to offer a 'clarification' of what the PM really meant: spending on equipment not the whole budget. He told SkyNews:

“I think what the Prime Minister was referring to was the pledge that was made – which Treasury ministers have repeated – that the equipment plan, the part of the defence budget which funds equipment, will rise by 1% a year in real terms after 2015."

No.10, possibly after a quiet or not-so-quiet word from the Chancellor, then underlined in north Africa its new line that 'no department is immune' from the spending squeeze that is coming.

'No department', of course, doesn't include the ring-fenced NHS and DfID, for example.

And that's really what this comes down to. With no cuts allowed in areas like health, the Treasury has to find its savings somewhere: it's just that no minister wants it to land on them.

It may have looked like a 'bombnishambles' today, but perhaps it just pointed up the wider game of Whitehall poker that is always played out ahead of a spending review.

Hammond today looked every inch the hawkish, penny-counting Chief Secretary to the Treasury or Chancellor his allies would one day love him to be. But in Cabinet the other week, he took a different line in private, stating he didn't want any more cuts to the MoD. It had plenty as it was, thank you very much.

Theresa May also warned that cuts to the policing front line would not be welcome.

Vince Cable, for his part, also told that same Cabinet meeting that his own department had already had cuts of 25%.

When the poker hands are played in the coming weeks, it's possible that the Business Secretary could argue that BIS is the very last bit of Whitehall that should be cut, given its central role in trying to get the elusive growth the economy (and Coalition) needs.

The PM himself has said that every department should be a 'department for growth'. But he will be counselled that with a triple dip looming, perhaps cuts to the embryonic industrial strategy, to innovation budgets or to skills would be the last thing business wants.

If the PM digs in (or digs himself into a hole) on defence spending being protected, and if Cable gets his way on BIS spending, perhaps the Home Secretary will have to step up her own lobbying too.

As I posted yesterday, the option many Conservatives would prefer - to pile the cuts onto DWP - may not be an option the Lib Dems will swallow.

The poker bidding has already started. But no one can quite work out who's the blind and who's the big blind...

 

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