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The Treasury must not be allowed to dictate to the military

By Julian Lewis, chairman of the Defence Committee

Telegraph Online – 7 July 2015

In recent years, defence has fallen low on our list of national priorities. Constant claims that it is the first duty of government find no reflection in the Ministry of Defence’s budget. While other departments have ring-fenced budgets, that of the MoD is completely unprotected. On Wednesday, the Chancellor of the Exchequer will deliver the first Budget Statement of the new majority Conservative Government. As such, he has an important opportunity to reverse this unhappy trend and to demonstrate the Government’s renewed commitment to defence.

The United Kingdom is facing both an international terrorist offensive and the revival of more traditional threats from potentially hostile states. The funding settlement for defence needs to reflect this reality. Defence-minded MPs on both sides of the Commons want to see a concrete commitment to spend, at the very least, 2% of GDP on defence – the designated NATO minimum – beyond 2016. To fall below this, in the present state of the world would be wholly unacceptable.

It is also disturbing that tomorrow’s Budget Statement will set out the funding allocated to defence, but only later this year will we see publication of the next Strategic Defence and Security Review. This strongly implies that the 2015 SDSR will be conducted in the same inadequate way as the 2010 SDSR. That SDSR was not strategic in its outlook but was driven primarily by the need to reduce public spending.

This year’s SDSR needs to be a serious piece of work setting out the nature and extent of the threats facing the United Kingdom, and what capabilities we need to counter them. Only then should decisions be made about what we can afford to safeguard our security. Instead, as in 2010, it seems as if our Armed Forces will be allocated a preordained sum and then tasked with providing as much defence as possible within that arbitrary funding limit.

Obviously, in the current economic climate, the Government will not be able to provide everything that our Armed Forces would like. But for any review to be credible, it has to begin with an assessment of the threats and a coherent strategy to deal with them. This needs to be followed by grown-up conversations, between the MoD and the Treasury, about what must be done now, what can be postponed without too much risk, and what is truly unaffordable.

Though important as a target for those NATO countries who have never achieved it, the commitment to spending 2% of GDP on defence must not be seen as an end in itself. For us, 2% is the bare minimum, given the threats currently facing us. During the later stages of the Cold War we routinely spent between 4% and 5% of GDP on defence. Yes, our GDP is larger now – but so are the costs of advanced defence equipment. Realistically, a 3% spending target is now more appropriate for a key NATO partner like the United Kingdom.

We must not allow the Treasury simply to dictate which roles our military can and cannot undertake. The UK is in the unique strategic position of being a vital bridge between Europe and the United States – and the USA is the ultimate guarantor of European security. If, because of financial constraints, we are unable to continue in that role, it will jeopardise the whole basis of NATO’s defensive and deterrent strategy.

So, when he makes his Budget Speech, George Osborne should offer much greater certainty and much higher priority to defence. He should announce the ring-fencing of the defence budget; he should confirm that the UK will commit to the NATO 2% target as an absolute minimum; and he should promise to provide sufficient funding to the Armed Forces for them to fulfil the requirements of the Strategic Defence and Security Review, even if this means an increase in the defence budget. It is time for the Government to live up to its own rhetoric on the safety and security of this country.