We need to read the fine print on the defence spending pledge

July 10, 2015 10:44 am

While IDS was punching the air to celebrate the Chancellor’s living wage announcement – delighting sketch writers and cartoonists across the country – many Conservatives were also whooping with joy over defence on Wednesday.

True to form, the Chancellor of the Exchequer took inspiration from Paul Daniels when delivering the Budget by pulling a couple of rabbits out of his proverbial hat (or the red ministerial box in this case). One was the living wage. The second was a commitment to maintaining the NATO defence spending target of two percent of GDP.

It was an announcement that few were expecting. The Prime Minister, and the Government as whole, had come in for a sustained bashing over defence spending from Tory backbenchers, defence experts and military leaders. No less than Barack Obama had been in touch with a simple message: stick to the two percent. But despite it all (and the Prime Minister’s previous exhortations for other members to meet the target), the Chancellor had resolutely refused to make the commitment for the UK.

That was until Wednesday. The Chancellor’s defence announcement was greeted as a “great day for our country,” by General Sir Nicholas Houghton, head of the Armed Forces. It was a sentiment echoed by many within the Tory ranks, and doubtless within the MoD and Armed Forces as well.

But while the Chancellor’s commitment to two percent of spending might have placated restless backbenchers and the neighbours across the Pond, the reality is far less clear cut. You have to read the fine print to realise what the Government’s done in full.

The two percent spend has been made up from the budget for intelligence and even foreign aid. And while it’s possible to argue that’s all part of a defensive effort, it comes across as a bit disingenuous. Ministers will argue that the UK has always applied a stricter definition of defence spending than other countries within NATO. It’s a legitimate argument, but ignores the fact that less than a month ago, the Chancellor was at the Despatch Box announcing the MoD would have to swallow a further £500 million in savings. Hardly compatible with adherence to the NATO target.

The newly elected Defence Select Committee chairman, Dr Julian Lewis, has insisted that including large amounts of intelligence spending in the NATO calculations should not satisfy “anyone looking for a genuine commitment to defence.” He’s absolutely right. The Chancellor has not only pulled a rabbit from a hat – he’s also pulled off a conjuring trick by making a smaller amount appear to be a significant defence spending commitment. It sets a dangerous precedent, and begs the question of what the Government might be willing to include in its calculations in future to meet the NATO target. Because more cash for the MoD doesn’t seem to be part of the equation.

July 10, 2015 10:44 am

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