In an impressive feat of persuasion, Ben Wallace and the Defence Chiefs have managed to convince Boris Johnson and Rishi Sunak to agree to the largest real-term increase in the defence budget since the early years of Mrs Thatcher’s premiership.
Their case was strengthened by the international situation, including intensifying competition with Russia and China. The need to show President-elect Joe Biden that the UK is still America’s most important defence partner also played a role.
Even so, given the dire fiscal situation that the country now faces, this is not a settlement which many analysts would have thought possible until recently. While the distribution over time is not yet clear, an additional £24 billion over four years is likely to equate to a real-terms increase of between 10 and 15 per cent over four years. Of Whitehall’s big spending departments, only the NHS seems set to receive more generous treatment in next week’s Spending Review. Others face only a single-year settlement, and potentially real-terms cuts in subsequent years.
As Foreign Secretary Dominic Raab has made clear, however, the UK’s reputation in the world does not only depend on military power. It is therefore a source of concern that the Chancellor is reported to be looking to cut the annual aid budget by as much as £4 billion next year, and to abandon the commitment to spend 0.7 per cent of national income on aid. Although the Government is likely to deny any direct trade-off, such a cut is roughly equivalent to the additional annual amount now being committed to defence for 2024.
Crucially, this announcement does not tell us what the increased budget will be spent on. There will be no shortage of demands. First of all, the MoD will need to close the gap in the equipment programme left by the underfunded 2015 review, which is likely to take up several billion of the £24 billion total. Even if the number of soldiers is reduced (and this remains uncertain), the Army needs a step-change in investment in new vehicles, drones, communications and other kit if it is to have what it will take to survive, and be effective, in the dangerous battlefields of the 2030s.
The Government’s commitment to invest further in a new generation of combat air systems was reaffirmed by Boris Johnson, but much more needs to be done to define the requirement for a programme that is likely to be the largest in the MoD’s portfolio by the end of the decade. The Integrated Review will have to make room for the new nuclear warhead, announced by Ben Wallace earlier this year without a cost estimate. Other requirements include new support ships and aircraft for the new carriers, investment in the new Cyber Force and Space Command, and whatever is needed for the Artificial Intelligence Agency.
Not least, defence needs to have something left over “just in case”. The nature of today’s world is that the nature of military threats continues to change, as do the technological possibilities for countering them. In order to make the best use of the considerable investment the nation is making in defence, therefore, it makes sense to set aside some part of the budget (especially in later years) so as to be able to respond quickly to new opportunities for investment.
As in the 2015 defence review, there will be pressure – from each of the services, from the MoD and, not least, from the Prime Minister himself – to want to add more and more to the programme, and then to make the sums add up by making implausible assumptions on “efficiency savings” or “spend to save”, only to end up with another funding hole a couple of years from now. That really would be a missed opportunity for defence. We will need to wait until the publication of the Integrated Review to see whether this mistake has been avoided.