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Autumn Statement means less funding for Defence - and potential Budget rebellions from Tory MPs

By Matthew Barrett
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In the Chancellor's Autumn Statement, it was announced that government departments would have to cut their budgets by 1% in 2013-14 and 2% in 2014-15. The Defence budget, with its already-fragile spending and severe cuts on the way, would appear to be particularly badly hit.

The MoD insists that the cuts later in this parliament will be covered by its reserve funds, which the Treasury has unusually agreed to let the MoD use for that purpose. However, the reserve funds cannot cover a new hole in Defence funding of £490m every year between 2015 and 2020, which the Autumn Statement creates.

Hammond Nov 2012The Financial Times (£) this morning reports that the Defence Secretary, Philip Hammond, will have to have difficult talks with the Treasury - the planned modernisations as part of "Future Force 2020" require a minimum budget which the £490m annual cut would jeopardise.

The MoD and Army leadership believe the Army has suffered too much already. The size of the regular (rather than including reservists) Army will, in 2020, be at its lowest point since 1800. Instead, the FT suggests spending reductions could be focused elsewhere - perhaps on a cheaper nuclear deterrent than Trident.

Tory MPs would find it hard to stomach either a weaker Army, or a weaker nuclear deterrent. The FT also reports that:

"Conservative MPs are preparing to do battle with George Osborne in the run-up to next year’s spending review over defence spending, which they argue should not be cut while spending on aid, schools and the NHS is protected."

Mark Pritchard MP is quoted as saying:

"There have been significant defence cuts and the government has been given the support by colleagues – albeit often reluctantly. That support won’t be guaranteed for any further cuts. If there are any more defence cuts we would start to question our position as a major military power and our ability to respond to medium-sized conflicts."

The FT reports a number of comments from Tory MPs in this vein. Obviously, with a sensitive issue like this, the Government would have a difficult time in the Commons, with debates condemning defence cuts, plenty of awkward questions for Ministers, and so on. But the FT reports a far more explosive potential Commons tactic that could be used to protect the Defence budget: "Although backbench MPs cannot block a spending review, they could take the extraordinary measure of voting against individual Budgets if they felt sufficiently strongly."

Although probably a long-shot, this would cause many headaches in the Treasury and Downing Street if it came to pass. The 0.7%-of-GDP-ringfenced international aid budget, or the similarly protected health budget, are the favourite areas of cuts for many Tory MPs, and any votes on those individual departments would prove a hairy time for the Chief Whip. The Treasury may just decide to talk to any MPs considering pushing for individual budgets.

> Andrew Lilico recommended cutting the Health budget in his column yesterday.


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