Can defence issues impact the election debate?
Ironically perhaps, Labour leader Jeremy Corbyn’s pacifist stance has caused defence issues to take slightly greater prominence in the election campaign that might be expected. Tories have been quick to seize on Labour’s “weakness” on defence. Although they are right about Corbyn, the Tories are on very shaky ground saddled by their own poor record on defence. The electorate is again largely faced with a choosing between the lesser of two evils. While global threats continue to intensify, the sorry state of UK defence urgently needs to be treated as more than just a sideshow in the pre-election political Punch and Judy.
Another black hole opens
Back in 2010, the coalition government claimed that the outgoing Labour administration had left a £36 billion “black hole” in unfunded defence plans. This was used the excuse for the slash and burn 2010 defence review which did particular lasting damage to the Royal Navy. Within the space of just 2 years, the then Defence Secretary, Philip Hammond was claiming the MoD finances were now balanced and the department’s “hand to mouth existence would come to an end”. By April 2017 the cross-party House of Commons Public Accounts Committee was reporting another £10 billion “black hole” in the equipment plan has appeared. Whatever we believe about these financial holes and their causes, it is clear that chronic underfunding of defence continues, contrary to Tory claims. Despite moving the security services and MoD pensions into the “defence budget”, in 2015-16 we did not even manage to spend the 2% of GDP that the Tories pledged. The latest ONS/Treasury figures say it was actually 1.9%, a total of £34.8Bn.
Defence inflation is running at between 4-6% annually so the buying power of MoD declines each year. Economies of scale and well-managed procurement projects usually see the unit cost decline, but overall defence equipment becomes ever more complicated, expensive to purchase, man and support in service. A Type 26 frigate in 2017 is projected to cost at least £800m. The last Type 23 frigate, HMS St Albans built in 2002 cost around £100m. A Type 26 will be more capable than a Type 23, but not even London house prices can match an approximate price rise of 800% over less than 20 years.
Brexit has seen the Pound significantly devalued by around 20% and it may fall further. The UK intends to purchase around £28Bn worth of defence equipment from overseas, mainly from the United States, in the next 10 years. This leaves a large part of the defence budget exposed to unpredictable for foreign exchange fluctuations. How far the pound may fall as the effects of Brexit are felt are difficult to predict. Some economists predict devaluation could go down to 30%. Others are more optimistic that the Pound will bounce back, especially if the Euro should weaken. Brexit may have other impacts on the economy and the chancellor is known to be holding on to contingency funds, should there be more serious economic problems. A weakening pound is, therefore, a significant threat to future defence planning. The Treasury holds some foreign currency reserves but not enough to offset a long-term devaluation.
On 10th May The Prime Minister promised defence spending “will rise by 0.5% above inflation every year to 2022”. Assuming inflation is around 2% then the defence budget would increase by nearly £5bn to £39.7bn by 2020-21. This rise in funding is will be partly offset by the negative factors listed above but this is welcome news. (Although it is not clear if she had agreed on this with the Chancellor before making the announcement.) Surprisingly in a survey of Tory party members, defence spending ranked as their highest concern.
Defence Secretary Michael Fallon is under great pressure as his very robust claims about the healthy state of the armed forces and the MoD are at totally odds with the assessments of the Public Accounts Committee and virtually all independent commentators. At the start of 2017 Fallon stated that this would be the “year of the Royal Navy”. The foundations for this optimistic claim have been thoroughly debunked here, but for the Navy, it did represent something very positive. There is a feeling that Fallon understands the naval case, is enthusiastic about the aircraft carriers and Trident, believing maritime should play the leading role in UK defence strategy.
It is certainly welcome to have a Secretary of State who is upbeat about the RN and putting his credibility on the line over its future. It is unfortunate that the resources his government provides the MoD are increasingly unable to match his rhetoric.
If Fallon’s year of the Royal Navy speech was optimistic, repeating his claim that we will have a bigger Royal Navy is stretching the truth to breaking point. The RN is increasing in size but only if we measure by total tonnage, a meaningless figure distorted by the large size of the aircraft carriers. There has been a vast reduction in hull numbers and since 2010, although we are bottoming out now. (More detail on recent Tory cuts to the RN here). Only if we get more than 5 Type 31 frigates could the fleet be described as having ‘grown’, and this remains a vague aspiration for something that is a decade away.
Publication of the National Shipbuilding Strategy has been delayed by the Purda restrictions of the election but the Type 31 Frigate programme offers a good opportunity for the Tories to strengthen the navy in a way which dovetails with their prosperity agenda and northern powerhouse policies. If the Treasury were to provide an additional £200M per year earmarked for the Type 31, it could create a stimulus for shipbuilding and industry across the UK, particularly in northern England.
The Labour leader is co-chairman of CND, has supported several terrorist organisations including the IRA, instinctively anti-American, anti-armed forces, opposed to NATO and argues all but two of Britain’s foreign military interventions since WWII were mistakes. His supporters claim “Jeremy is on a journey” and is softening these extreme views despite consistently upholding these ‘ideals’ for many decades as a maverick backbencher. This is shameless window dressing to make him appear more palatable as a potential Prime Minister.
Despite Tory failures on defence, most would agree the idea of Jeremy Corbyn & his shambolic cabinet running defence would be infinitely worse.
Corbyn has recently announced he wants to create an Orwellian sounding “Ministry of Peace” to sit between the MoD and the Foreign Office. Such apparently high-minded idealism is hopelessly at odds with the realpolitik that drives much of global politics and is music to the ears of Putin and his kind. Corbyn rightly suggests the UK should be “actively engaged in seeking peaceful solutions to the world’s problems”. But we stand much greater chance of getting those solutions if we are equipped with forces that can uphold international law and face down bullies and tyrants.
The Labour party election manifesto says they remain committed to Trident, while the leadership says they could never actually use nuclear weapons, thus undermining the point of a deterrent. There is chaos and division within the party over this and many other issues. Although it has some good MPs, Labour is clearly unfit to form a coherent government or be trusted with the security of the nation.
Fortunately, it looks very unlikely Corbyn will ever be Prime Minster. What is most concerning is the lack of effective opposition to hold the Tories accountable. On defence matters, in particular, Labour’s lack of credibility and confused thinking leaves the Defence Select Committee (with its limited powers), and a few well-meaning backbenchers as the only real challenge in Westminster to Tory mismanagement at the MoD.
The election of Donald Trump and the Brexit vote are seen by some as reasons for another defence review in 2018, ahead of the planned 2020 review. This is the view of the Prime Minister’s national security adviser, Mark Sedwill. There is some merit in the argument from a strategy perspective but without the promise of more funds, it would be a largely academic exercise and could cause more unhelpful disruption in the MoD.
An open letter to the Government on written on 11th May, signed former senior officers says the Prime Minister must confront “the need for a brutally honest appreciation of the budget for and capabilities of the UK’s armed forces”. But they argue we do not need another defence review because the 2015 SDSR equipment plan was essentially sound. However, they recognise that the promises of 2015 were never fully funded… “and if this means a commitment to increase expenditure over the lifetime of the Parliament, then do it”.
A few reasons for optimism
Despite the large funding gap, it is better to have the promises made in the 2015 SDSR than just a bleak round of cuts that we had in 2010. The weakening pound may be a boost for UK warship exports and could make the Type 26 and 31 attractive to foreign buyers. The conditions created by Brexit further enhance the RN’s case at a time when Britain needs to show it remains engaged with the world. The RN is still the strongest navy in Europe, we should invest further in this useful asset which can contribute further to European security through NATO. New equipment is arriving, slow and in small numbers, though it maybe. The aircraft carriers and their aircraft are coming. The first Tide class tanker has arrived in the UK with 3 more soon to follow. The seven Astute class submarines are potentially the best SSNs in the world and construction of the first Type 26 frigate will begin in July.
The Tories are firmly behind Trident renewal programme which is central to both UK defence and the future of the RN. Although there are concerns about the cost there are encouraging signs that the programme will be managed very carefully. A respected financial troubleshooter from the Treasury, Julian Kelly was recently appointed Director General, Nuclear and the Dreadnought submarine programme will be managed with much more care and stricter financial control than typical defence projects.
It is interesting to note that while the Tories look likely to win the election convincingly, the leaders of all the other parties in Westminster (except the DUP) are anti-Trident; Jeremy Corbyn (Labour), Angus Robertson (SNP), Tim Farron (Lib Dem) and Caroline Lucas (Green). It would seem the electorate better understands the value of Trident than many Westminster liberals, a policy of unilateral disarmament is historically electoral suicide.
- In search of the RN’s political friends – mainstream parties (Save the Royal Navy 2015)
- In search of the RN’s political friends – minority parties (Save the Royal Navy 2015)
- Report on The Defence Equipment Plan (Commons Public Accounts Committee)
- Defence spending (Institute for Fiscal Studies)
- GE2017: Bad Times for Hard Facts on Defence Spending (RUSI)