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LUFF Peter

Sir Peter Luff is the MP for Mid Worcestershire and was Defence Equipment Minister 2010-12.

Defence has traditionally been a strong-card for the Conservatives, but there is a real risk that this will not be the case in the 2015 election. The world is a more dangerous one than it has been for decades, yet the Coalition plans to cut defence spending still further – to well below the two per cent NATO target which we have lectured our allies about for years.

Simultaneously, it plans to conduct a near-secret defence and security review (SDSR) which will settle how these diminished funds are used. At a time when we should be more open than ever with the British people about the scale of the dangers we face, a behind-the-doors SDSR, driven once again by the importance of deficit reduction, risks the state turning its back on effective national security almost by accident.

Michael Fallon’s apparently unscripted comments in his speech at Conservative Party Conference suggest we have a strong advocate of the two per cent target. But, much as I would like to, I cannot see the Treasury accepting two to three per cent real terms growth in the defence budget as the economy grows.

So the red line, for any new administration of whatever hue, should be to insist on the planning assumptions previously agreed with the Treasury and Downing Street being sustained – one per cent real growth in the equipment budget, and flat real for the rest.

For too long now we have been living a lie: that we can avoid strategic shrinkage while cutting defence spending.  So even with the budget planning assumptions implemented, the 2015 SDSR will have to make unpalatable decisions – or simply not be credible. The salami has already been sliced very thinly indeed.

This means that the choices facing ministers in 2015 – whole capabilities perhaps being abandoned – will make the ones we made in 2010 look easy by comparison. The aspirations set out in the 2010 review for Future Force 2020 just can’t be met if there is any further reduction in resources.

But holding to these plans is going to be a challenge. The figures announced in the 2013 spending review showed that total MoD Departmental Expenditure Limits (DEL) will fall by 11 per cent in real terms between 2012/13 and 2015/16. RUSI’s recent examination of the figures shows defence spending falling to 1.88 per cent of GDP in 2015-16.[1]

Thereafter, with half of spending ring-fenced (health, schools and international development), the 7.5 per cent cut planned for current expenditure from 2016 means an average 15 per cent cut for non-ring-fenced departments like Defence.

Unsurprisingly, our American allies are now saying quite openly that our reduced capabilities are already moving us from being strategically significant to merely useful, at best. For a country that needs an open, stable, rules-based trading environment, this is folly. For a country that prides itself on “punching above its weight” and having real influence in NATO and at the United Nations, this is the last chapter of a sorry decline in its power and authority.

In such circumstances we need a proper national debate about how much we should spend and what we should spend it on. The intention, however, is to conduct the SDSR behind closed doors.

What makes things worse still is that it is painfully obvious that the current timetable for SDSRs is far from the most effective for the development of strategic coherence. As it currently stands, with fixed term parliaments likely to remain a fact of life, each review will be held in the first year of a new administration. This will certainly be the case next year.

Even with the re-election of the same party or parties to government, considerable turbulence is inevitable in ministerial teams – but before they have their feet properly under their desks, the new ministers will be thrown into the complexities and high strategy of a crucial SDSR.  This is madness.

The logic claimed for the current process is that it sits well alongside a Comprehensive Spending Review, which determines the resources available for each department. But this puts the cart before the horse. The very first purpose of government is the defence of the realm and the security of the people. Defence should be one of the first calls on the Treasury’s resources.

So I have been pondering whether detaching the SDSR from the CSR drumbeat (say by a year) is likely to make for more informed and strategy driven decision making. My conclusion is that every alternative brings new problems – unless the Treasury were willing to offer Defence a blank cheque, exempting it from the full rigours of the CSR process, and we know that’s not going to happen.

But could the risk of turmoil in 2015 be reduced by an open process with policy papers published in advance to which the major opposition parties – and industry – have contributed and, where possible, agreed?

Could we separate out more clearly the strategic security policy issues, settling them first across the Party divide – with the consequences for delivery, by Defence, the Home Office and others, the subject of a subsequent, more clearly separate process? In theory, the National Security Strategy comes first and “the associated Strategic Defence and Security Review … builds on it.”[2] Well, let’s give that theory greater reality.

And Parliament should debate the annual report on the NSR and SDSR.  This important document is a rather limp photocopied document at present, considered only by a joint committee of both houses. Most issues facing a government, from the NHS and education to welfare reform – just can’t be depoliticised. Perhaps defence, pace the deterrent, can be, at least in large part.

There are also some useful parallels between the way the Government has approached the development of industrial strategies – including the Defence Growth Partnership – over the last two years and the way the SDSR could be approached next year.

The industrial strategies have been based on open, senior, conversations between industry and Government to ensure that both sides are well informed of the choices that are going to be made. Engagement with industry, which has been so effective in the Defence Growth Partnership, is crucial to the success of the next SDSR.

Additionally, it makes sense to talk to industry not only to understand what major changes may be necessary but also to minimise commercial and industrial instability. The long-term nature of most defence equipment and capability decisions, often stretching over decades though, means we should do our very best to build consensus.

So I remain very disappointed that there appears to be no public dialogue about the SDSR in advance this time round – something that was partly addressed by the last government’s green papers ahead of the very belated 2010 SDSR.

Defence faces cuts and secrecy. It should not be like this. We need to be more open and inclusive in advance of SDSRs – especially since another round of cuts is inevitable, and the future facing our armed forces is so worrying.

[1] The Financial Context for the 2105 SDSR, Malcolm Chalmers, September 2014

[2] A Strong Britain in an Age of Uncertainty: The National Security Strategy, published 10th October 2010

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