The claim
“Freezing the budget across this parliament at £33bn gives us the fourth largest defence budget in the world.”
David Cameron, Prime Minister’s Questions, 13 March 2013
The background
The Prime Minister was accused of breaking promises on defence today.
At PMQs, Russell Brown, the Labour MP and shadow defence minister, said that David Cameron had promised to protect the defence budget “in its entirety, but you didn’t”.
His question came, he told us, in the wake of claims by the Defence Secretary, Philip Hammond, last week, that “for the first time in a generation, we have a balanced [defence] budget.”
Yet days earlier, the same defence secretary had taken the unusual step of stepping forward to plead that his budget is spared from cuts as George Osborne attempts to find another £10bn.
Has the defence budget really been frozen?
The analysis
According to the Stockholm International Peace Research Institute, latest international figures suggest that the UK is indeed the world’s fourth biggest spender on defence.
In 2011, at current prices, the US came first, with a spend of $711,421,000,000. Then China, at $142,859,000,000; then Russia, at $71,853,000,000, and then the UK, at $62,685,000,000.
The UK doesn’t come fourth when it comes to spending as a proportion of GDP; not even close. In 2010, the latest year for which figures were available, Saudi Arabia spent the most on defence as a percentage of GDP (10.1), followed by Oman (8.5), then the United Arab Emirates (6.9) and then Israel (6.5). The UK comes in at 36th, spending 2.6 per cent of its GDP on defence.
But Mr Cameron’s used a reasonable and commonly used measure – total spending – and on that score, he’s right.
What we’re not clear on is why he said there is a freeze on spending over the life of this parliament, when spending is clearly expected to come down.
We asked the Ministry of Defence how much was spent on defence in 2011/12, and the answer was £34.2bn.
The Ministry said it would spend £34.36bn in 2012/13, £33.86bn in 2013/14, and £32.96bn in 2014/15.
All of that amounts to slight cut over the current Parliament in nominal terms, and a bigger cut in real terms, when inflation is taken into account.
In 2013/14, and 2014/15, the figures are lower than originally intended. In the Autumn Statement in December, George Osborne said that defence for 2013/14 was to take a cut of £245m, and of £490m in 2014/15.
In addition, when the National Audit Office examined the government’s spending plans, it said there may be questions over future budgets, owing to a £159bn 10-year equipment plan.
The report makes it clear that the plan could rely on diverting some money from the non-equipment budget. “Achieving affordability is … contingent on savings being achieved elsewhere in the budget,” the report says.
Which means that we may yet see further cuts to defence.
The verdict
We can’t see why Mr Cameron is claiming that his government has “frozen” spending at £33bn under this parliament. Clearly, spending on defence has been cut under his leadership – in cash terms and in real terms.
And that casts into doubt his claim that even at £33bn, at the end of this Parliament, the UK will still have the fourth largest defence budget in the world.
How can we know that when this Parliament hasn’t actually ended yet? We still don’t know what our rivals intend to spend. France, which is currently fifth, could decide to buy a new fleet, or to boost spending on military staff wages.
As to what happens after this parliament, Professor Malcolm Chalmers has warned that “the Ministry of Defence could also face a very difficult 2015 Spending Review, especially if the country’s wider fiscal position remains as difficult as is now projected”.
Agreements between Nato countries commit them to spending at least two per cent of their GDP on defence, so at the moment, the UK has a margin of 0.6 per cent.
What did Number 10 make of all of this, we wondered? They offered no response.
