This Article was written by Dr Liam Fox for the Red Box Section of The Times on Monday the 23rd of February 2015
The defence of the realm – the protection of our country and its people – has long been understood to be the first duty of government. Ultimately, it means that, if necessary, security gets the first call on public expenditure.
As Denis Healey put it during the Cold War, “once we cut defence expenditure to the extent where our security is imperilled, we have no houses, we have no hospitals, we have no schools. We have a heap of cinders”.
In time of war, there is little debate about prioritising money towards defence. Most of the time, however, the Ministry of Defence has to compete with other departments for a share of the public spending cake. What are the factors that will determine where defence comes on the spending ladder after the general election?
First, there is the international security situation. While there has recently, and rightly, been a great deal of focus on Isis and the situation in the Middle East, Britain’s military commitment is still relatively small. Although we are involved in airstrikes as part of the coalition, protection from returning jihadists is still largely the preserve of the security services. It is worth pointing out, however, that the amount being spent on the security services in a year is less than the UK spends on the heating allowance for the elderly!
The real, and rising, threat to Britain’s security comes once again from Russia.
This is not necessarily because Russia poses a direct threat to the UK, though its forces regularly test our ability to defend our airspace and territorial waters, and there are still large numbers of Russian nuclear missiles pointed at the UK.
The threat manifests itself indirectly because of the threat to some of our Nato allies. Malign Russian activity in the Baltic, the Balkans and the south Caucasus should remind us that under Article 5 of the Nato treaty an attack on one member is an attack on all.
The second factor affecting budgetary considerations involves commitments already entered into – such as upgrading our nuclear deterrence and increases in capability outlined for Future Force 2020 in the 2010 strategic defence and security review. This will include the training and manning for the new carriers as well as provision of the F35 joint strike fighters that will fly from them. Some calculated risks taken in the 2010 SDSR cannot be taken any longer. The decision to have a gap in maritime surveillance capability (after the debacle of the ten-years-late and massively over budget Nimrod programme) was taken at the limits of what was deemed to be acceptable risk.
That capability gap needs to be plugged now and the likely candidate – Boeing P8s – will not be cheap, costing probably about £1 billion.
The third factor affecting the budget calculations will, of course, be the overall fiscal position. I have long been a fiscal hawk, arguing that cuts in public spending should have been deeper and earlier.
Defence took its share of those cuts, not least because we had to deal with the budgetary black hole left by Labour in the MoD, which was substantially bigger than the £37 billion that we estimated in opposition. Most in the military understood the need for fiscal consolidation and the concept that debt could in time become a strategic issue, but seeing budgets such as overseas aid increase was a cause of huge unhappiness and unease. In the current security environment, a repetition of this pattern would be unthinkable.
The fourth consideration relates to Britain’s place in the world and our international reputation. For years we have been lecturing our Nato partners that they have not made sufficient financial contribution to the alliance – and with good reason. Only four Nato nations currently meet the 2 per cent of GDP spending on defence that is supposed to underpin the organisation’s capabilities. Too many of our allies seem to want the insurance policy without paying the premiums.
For Britain to fall out of the 2 per cent club would not only be a source of great anxiety to the United States, which already carries a disproportionate burden in terms of Nato spending, but will hugely undermine Britain’s moral authority and our ability to persuade others to make the spending commitment.
Of course, countries can meet that 2 per cent target and yet make little meaningful contribution to military capability, and some will argue that Britain can afford to spend less than 2 per cent of GDP on defence because of the high quality of our contribution. This is to underestimate the impact that such a decision would have, particularly in Washington, and its consequences for close co-operation with the United Kingdom on military matters.
If we made such a decision, while choosing to prioritise other programmes, it would be a statement of how we see our international role, prestige and influence.
Even if we did not see it as such, others certainly would. The defence budget debate will be a controversial one, whose impact will be felt well beyond the Treasury and Whitehall.