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Tue, 14 July 2020

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The Chancellor should acknowledge that his Government is responsible for the defence funding crisis

The Chancellor should acknowledge that his Government is responsible for the defence funding crisis
3 min read

Former Defence minister Kevan Jones assesses the detail behind the Budget and the publication of the Defence Equipment Plan.

Delivering the autumn budget the Chancellor, Philip Hammond, spoke with glib when he stated that as a former Defence Secretary that he understood the immediate pressures the Armed Forces are facing and would therefore be providing an additional £1bn to the MoD for the next two years.
However, looking at the small print, it is immediately obvious that this is not new money to replace desperately needed capabilities scrapped during the last eight years, nor to tackle the very real manning crises faced by both the Royal Navy and the Army.
This cash will be instead for a very specific purpose.  To address the higher than expected level of spending of the Dreadnought nuclear ballistic missile programme, which has been running more rapidly than anticipated ahead of schedule, with payments being made earlier.

Without the extra £1 billion announced by the Chancellor, it is possible that the MoD would have needed to slow the Dreadnought programme, leading to larger costs later on.  
In being deliberately vague about the destination of this cash, the Chancellor is playing smoke and mirrors politics, reinforcing my view that his understanding of defence and international security is viewed through a very narrow prism that undervalues the important role conventional forces play in deterrence.  
One week after the Budget, the National Audit Office reported that the Ministry of Defence’s £193 billion Equipment Plan to buy new kit faces a possible £15 billion budget black hole, with the vast majority of funding risk falling in the next four years.
During the past eight years, the coalition and Conservative Governments have cut 16% of the defence budget, creating gaps in capability and reducing troop levels in the Army to record lows.  Many of the additional costs associated with the Equipment Plan have been incurred as a result of poor decisions by the MoD under Philip Hammond’s watch as Defence Secretary.
It is also estimated that the Government’s October 2010 decision to delay the renewal of the nuclear deterrent, undertaken for political reasons to patch over a Tory-Lib Dem coalition rift, cost a minimum of between £1.2 billion and £1.4 billion which the Chancellors new £1 billion will never offset entirely.
Added to that, over-optimistic efficiency savings have not been realised, which were designed in part to fund the Equipment Plan. 

Finally, this Government has failed to take seriously its responsibilities in defining a defence industrial strategy.  Both combat air and warship development in this country face an uncertain future with those industries facing looming redundancies.  Government defence spending in the North East, Yorkshire and the Humber was just £40 per person in 2016/17 compared to £920 in the South West and £540 in the South East (excluding London).
The Chancellor was right in saying that as a former Defence Secretary he understood the immediate pressures the Armed Forces are facing, but he should also acknowledge that decisions taken by the Conservatives in government have led to today’s funding crisis facing defence.
Kevan Jones is the MP for North Durham and a former defence minister

Read the most recent article written by Kevan Jones MP - After Brexit, we should consider an ambitious defence relationship with Australia