Defence spending squeeze

If David Cameron does not want to be made a hypocrite for criticising those NATO countries spending less than 2% of GDP on defence, the Treasury must find more money for the MoD. He may lose the general election in May, of course, which might afford an excuse, but he will need to act if he wins.

Thanks to Malcolm Chalmers, RUSI Research Director, we have a little more data to be going on with. In his briefing paper, ‘Mind the Gap: The MoD’s Emerging Budgetary Challenge’, he projects, having studied the known spending plans of all three major political parties, that defence spending will fall to 1.85% of GDP in 2016/17, equating to £36 billion.

Notwithstanding any reservations we might have with arbitrary targets, this represents as clear an indication as we are likely to get that the Armed Forces are going to come under severe strain in the years ahead unless the government changes its priorities.

If we thought for a moment that the falling percentage might only be a consequence of increasing GDP – not of falling spending – we are mistaken. He predicts real-terms reductions of 10% over four years. This, he admits, is the pessimistic projection, but it is where we are heading if things don’t change.

Whatever your view on the importance of defence spending, this represents a real diminution in defence capability. And this at a time when the world looks as dangerous as ever. We do not need to list the threats: they are self-evident.

Part of the problem is a reluctance to add defence to the list of protected areas of government spending: International Development; Health; Schools, for example. It is a truism, but it is worth saying: the more we protect some areas of spending, the more we have to look at cuts in other areas.

The report says we must add something in the region of £5.9 billion to the defence budget if we are to maintain defence spending at 2% of GDP. It also says this is ‘not plausible’.

That seems like a generous word: ‘Plausible’. If it is taken to mean an increase in the budget is unlikely, an increase would indeed seem ‘not plausible’.

But if ‘plausible’ is used to mean what is reasonable, it is reasonable to expect the government to shift spending to defence from elsewhere. After all, the government already spends more than £700 billion a year. It’s always and everywhere a matter of priorities. If a government wants to find the money, it can: it’s simply a matter of not spending money on something else.

Politics may yet intervene. Pressure from the Commons, the Lords, the Defence Select Committee and, of course, the Opposition sniffing an opportunity, might force the government (of whatever colour) to find the money, even if, as the briefing paper suggests, it would have ‘to be found from increased taxation and/or borrowing’.

But perhaps the government has no intention of spending more on defence. There are, as the strategists give every impression of believing, no votes in defence. Though if the Conservative Party wants to retain its core vote, it might think twice about undermining yet another area of national life it’s core supporters think important. If the Conservative Party is not for strong defence, what is if for?

If the MoD is left with no option than to absorb real spending reductions, what are the options?

Personnel? Well, the personnel budget has already taken a hit. We know 20,000 soldiers are in the process of being cut, leaving the strength of the Regular Army at 82,000. The briefing paper goes further: we have reduced the numbers of service and civilian personnel by 17% and 28% respectively.

There are murmurings that the personnel budget will again be targeted, perhaps reducing the Regular Army by another 20,000. Perhaps this is little more than contingency planning, never to be implemented, but we cannot be sure. Politicians have a way of leaking stories to the media to see how they ‘play’ with the public. If the grumblings are manageable, then crack on—no votes in defence.

But it will be harder this time around to cut troop numbers further. You can squeeze only so much water from a sponge.

That leaves the equipment budget. Can savings be made here? Perhaps. The Defence Equipment Plan 2014 refers to a budget of £163 billion (for both procurement of new and maintenance of old) over the next ten years. While it might be difficult to make savings on some big-ticket items, not least a submarine replacement for Trident, there could be scope to cut in other areas.

Whatever happens, the MoD is in for a torrid time. It will either have to argue for more money, or it will have to find things to cut. Not an enviable task, even though there are no votes in defence.

Still no votes in defence, supposedly

It is being reported in The Times and The Mail newspapers that a number of Tory MPs are not happy with the government’s stance on defence spending. About thirty of them, we are told, are preparing for some sort of Commons revolt next week when NATO spending is debated.

Their anger stems from the growing impression that the Tory hierarchy isn’t that bothered about defence. Defence of the realm is supposed to be a Conservative issue—the first responsibility of government—so you can see why some might be upset by these reports.

It seems increasingly likely that defence spending will fall below 2% of GDP, which is the amount all members of NATO are supposed to allocate to defence. This, of course, does not necessarily mean defence spending will fall in real terms, just that it will fall as a percentage of national wealth—provided the economy grows. Having spent so much time berating other members states, it seems a bit rich for us to fall below the level in the next year or two.

But there are also whispers that defence spending will fall in real terms, too. What they are talking about is a freeze, holding spending to about £36 billion for the next few years. When inflation is taken into account, this amounts to a real terms reduction in defence spending. This would have a real impact on our defence capabilities.

And on top of this, the dreaded phrase “There are no votes in defence” is raising its head again. Allegedly from Philip Hammond the Foreign Secretary no less. I have no idea whether he said this (his people say not), but if he did it would not have been a radical observation. Perhaps it’s because the benefits of defence spending are too intangible—much better to vote for benefits, subsidies and spending on things people will draw on every day, such as health or education.

It would also seem that these Tories have a right to be suspicious. The Coalition government has already slashed the size of the Army by 20,000 soldiers. This is 20% of total strength. By anyone’s measure, even when offset by the proposed uplift of 10,000 reserves (which is still a concept that needs to be proven), this is a significant reduction in our military strength.

Coming at a time when the threat from Russia to its neighbours, particularly the Ukraine and potentially the Baltic states, seems to be on the rise; and at a time when the threat from Islamism shows no sign of abating and every sign of increasing: it seems entirely logical that MPs with an interest in national defence should make their point.

It’s just that I’m sure the government would prefer them to make their point in private, and then shut up about it.

Does it matter if defence spending falls below two percent of GDP?

Much is being made at the moment of NATO’s “2-20” goal: that members ought to spend at least 2% of their GDP on defence, with about 20% of that figure going on equipment – the argument being that if NATO underspends on defence then a) the deterrent effect is undermined, and b) NATO countries will find themselves outgunned if it does actually come to war.

I say ‘at the moment’ but the issue was raised last year at the NATO summit in Newport, Wales. Barack Obama and David Cameron, in a joint article in The Times, criticised members who were not meeting the 2% target and thus not carrying their weight – their weight defined not in absolute terms but in terms relative to their national wealth, which seems a fair way of going about things.

Michael Fallon, Secretary of State for Defence, made a similar point: ‘US taxpayers won’t go on picking up the cheque if we choose to prioritise social welfare spending when the threats are on our doorstep.’

But this has been the case for decades, has it not? It’s not something EU members like to admit; they prefer the conceit that the cause of post-WW2 peace is largely down to the existence of the EU and its former institutions rather than other factors: War weariness; German pacifism; nuclear deterrence; NATO-Warsaw Pact balance; and above all US military and diplomatic power.

Only the USA (4.4%), UK (2.4%), Greece (2.3%) and Estonia (2%) met the target that year – the USA understandably well ahead of the others. We know why Britain is one of the four, but the inclusion of the last two is interesting for different reasons: Greece is skint and so one might excuse them for not hitting the target unlike, say, Germany (1.3%), which is loaded; and Estonia shares a border with Russia and has living within its borders a 25% Russian population and so perhaps might feel a vested interest in spending more on defence.

All other member states fell someway short, Iceland managing a seemingly unfeasible figure of 0% of GDP. But maybe this is a rounding error; it’s difficult to believe they don’t have at least one coastal patrol vessel. Though whatever the particulars of this example, it seems that the majority of NATO countries are not pulling their weight.

So it would be embarrassing, would it not, if the UK fell below the spending target of 2% of GDP. It certainly would, especially after all that finger pointing. Yet this is what is being reported: that George Osborne has told the Prime Minister that on current projections spending will dip below the threshold sometime by 2017.

Personally, I’m not a fan of arbitrary spending targets: if a department is instructed to spend a certain amount of money simply in order to hit a target, the chances are that a good proportion of that money will end up being spent on things we neither need nor want.

‘Don’t worry, Minister, we’ve hit the target,’ is not a comment I want to hear coming out of any senior civil servant’s mouth. Unless, that is, he’s reporting on some sort of recent military engagement. In that case, hitting the target is entirely appropriate.

But if ministers make a big thing about a target, then they really ought to meet it – otherwise they’d be better off not having it; hostage to fortune etc. We can see how the arbitrary 0.7% target for overseas aid has become a political football. If you question it, you are guilty of wilfully killing babies; and if you are for it, you are guilty of high-handedly redistributing money from the poor in Britain to the rich and corrupt in various foreign countries.

The arbitrary target, therefore, can skew the business of government – despite best efforts, I’m sure. For the example of overseas aid, political action becomes less about the rightness and practicality of a particular scheme to help less fortunate countries, and more about the political imperative to meet the target come what may. Success should be defined by its outcomes on the ground, not by reaching the arbitrary target.

How useful are these goals anyway? Why spend 2% of GDP on defence? Why not 1% – or indeed 4% like the USA?

Perhaps the numbers themselves are irrelevant. Military people talk about defence capabilities – naval fleets, air force squadrons, army battalions and formations. What will be – and should be – exercising the minds of defence strategists is not so much the target, but the outcome of the spending each NATO member allocates to defence and how each component part might be brought together as a whole.

NATO itself has recognised that fiscal constraints perhaps necessitate a new approach – or at least a modified one. Smart Defence, for example, encourages member states to cooperate: not just in the development and acquisition of capability, but also in its operation – in cyber defence, missile defence and joint intelligence for example.

But whatever this capability looks like and however it is distributed between member states – it costs money. In these cash-strapped times (last year’s UK budget deficit was £100 billion) it is understandable that governments will be tempted to let defence spending slide: especially because politicos tend to see few votes in defence.

Even so – resurgent tensions with Russia and surging instability in various Islamic countries suggest that defence, though perhaps an unpopular way to spend money, remains essential. Or not, as our politicians will decide?

More Reservist Call-Outs

In what I will now call ‘We need to call out the Reserves for this?’ series of posts, I notice Mr Mark Francois, the Minister of State at the Ministry of Defence, has issued another Call-Out Order for the Reserves.

This time it’s a renewal order, under section 56(1B) of the Reserve Forces Act 1996, to extend authority to send Reservists to the United Nations Peacekeeping Force in Cyprus (UNFICYP).

We are told that over 100 Reservists have been called out for Cyprus duty in the last 12 months, and that we are to do the same for the next 12 months, this order ending in December 2015.

I’m all in favour of Reservists serving with Regular forces, both on exercises and on operations. Many Reservists want to serve, have flexible jobs that enable them to take six months or so off from their day jobs, and many could do with the money. Many of them are also highly competent.

But although these call-outs will only involve volunteers who are ‘willing’ and ‘have the support of their employer’, it is still bizarre that we do not have the Regulars to meet this ongoing commitment. That is the serviceman’s job, it is why he (and she, of course) has made it his full-time job.

This is the thing about the Reserves 2020 plan. On the one hand it does something worthwhile: attempting to make the Reserves more ‘capable, usable, integrated and relevant’. Who could argue against this? But these are virtuous words that are deliberately hard to dispute. Who in their right minds (apart from Islamists and our own domestic Britain-haters; though one might question the soundness of their state of mind) would deliberately set out to lessen the capability of the Reserves?

On the other hand, the plan does something less worthwhile: actually making the Regulars less capable and usable. A reduction in the Army alone of 20,000 soldiers, comprising 20% of its existing strength is staggering when the figures are considered in any detail. The simple maths does not add up. We are recruiting approximately an extra 12,000 Reserves to replace the 20,000 lost Regulars. It doesn’t make sense.

It doesn’t make sense, that is, unless we see it for what it really is. Britain is skint and we simply cannot afford to maintain the force levels of former years. This is what the government had to come to terms with when it achieved office in 2010, and reducing the Regulars is one of the ways they are attempting to balance the books (though not doing a great job; Britain still managing an annual deficit of about £100 billion). They could prioritise spending differently, but they choose not to. That is where we are.

And so we will have to push on with trying to integrate the Reserves with the Regulars and using them a lot more than before. In one sense this is a good thing. The Reserves have a lot of capability. But in another sense it’s a bad thing: a recognition that Britain is on the wane. Sad that. But true. And it is still not clear we will be able to recruit the proposed numbers of Reserves.

Why call out Reservists for this?

The Minister of State for the Armed Forces, Mark Francois, it seems, has just issued a call-out notice authorising the mobilisation of Reservists for operations in Northern Iraq. Mostly this will be RAF personnel, only if willing and supported by their employers, and only a few of them.

This is, we are told, ‘fully in line with our policy of having more capable, usable, integrated and relevant Reserve Forces’.

Quite. That is the policy. But we should be clear that even if the principle is decent enough – why have Reserve Forces we cannot use? – it says quite a lot about the present state of the Armed Forces, in this instance specifically the RAF.

The current mission in Iraq is minute. It is so small that on its own it would not so much as blow down a pack of cards. The last Ministry of Defence notice of action reported two Tornado GR4s attacking an ISIL target. That’s two aircraft.

And we need to call out the Reserves for this?

We may have been forced to pare the Armed Forces to the bone by the unfathomable budget deficit, but it is deeply worrying if we cannot mount this meagre operation without calling out Reserves. What happens when we need to deploy a proper military force?

The British Army might be on the verge of disbandment – not good.

Scotland might be about to leave the United Kingdom. It’s worth saying this one more time, in the hope the enormity of separation might actually sink in.

The consequences will be staggering. 300 years of unrivalled history will be ended, possibly the era of greatest internal peace these islands have ever experienced; the island of Great Britain will be split, just like Timor (well, perhaps not just like Timor); and an artificial national barrier will cut the British people in two, ushering in an era of separate development, divergent history and increasing friction.

None of this is good. There is one consequence of people in Scotland (note: not the Scottish people; see here) voting ‘Yes’ later this month we haven’t much discussed. That is the impact on the British Armed Forces. David Blair, however, writing in the Telegraph, has noticed. He uses the phrase, ‘broken into pieces’.

He’s not much wrong, either. Salmond, despite his pacifist rhetoric, expects to take Scotland’s share of fighters, frigates and battalions. None of this sounds like much, but, when we remember that the British Army has just been cut by 20,000 soldiers (20% regular combat strength), it is worth considering the impact of a further cut to what remains one of the few serious military powers in the Western world.

But combat strength is not just about numbers. British military doctrine considers this part of the physical component of fighting power. There is also the moral component, which might be translated for the non-military mind as morale, spirit, heart, motivation and a sense of pride and duty. And this is where the British Army will be hit hardest. What will happen to the name? We might keep it; Britain is, after all, comprised of England and Wales, Great Britain being England, Wales and Scotland. But it will be something of a sham. Without Scotland, the British Army cannot lay full claim to the name.

But what’s in a name? Quite a lot, actually. A name carries history; and the history of the British Army is as important to the morale of the British Army as anything else – indeed, it is from history, from former battles and wars that we draw much of our store of morale. Goose Green, Imjin River, Market Garden, Battle of Britain – these battles and operations inspire the present generation, in all services.

It is true, the Royal Navy will not have its name challenged; it will remain the navy of Nelson. Neither will the Royal Air Force have its name challenged; it will remain the air force of Douglas Bader. Tracing a direct line to former military greats is important; it is tradition, and it is the core ideology of the British regimental system. Break that link and we break that history; the army of the rUK will have to start again. Pity that.

But perhaps the British Army will keep its name. It might do that. But as I’ve said: it will be denuded not only about 10% of its strength, as will the other services, but it will lose much of the power of its history. Reputation is important. It affects the morale of both friends and foes; ‘Win the war before you even begin to fight it!’ said someone quite wise. The absence of the British Army will not make the world a better place – promise.

If the people in Scotland who have a vote (see above) decide to go their own way, then there is probably nothing we can do about it. Democracy is still it. But it will present all sorts of challenges, not least for our military structures. Do we fully comprehend that? I wonder.