Wednesday, 20 September 2017
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UK defence procurement

Extracts from a submission for the Strategic Defence and Security Review by Oliver Covile MP. Mr Colvile is MP for Plymouth Sutton and Devonport and chairs the Royal Marines group within the All Party Parliamentary Group for the Armed Forces.


The Strategic Defence and Security Review is being conducted in the context of a much wider public expenditure review. Public expenditure needs to fall as a proportion of national income to stabilise the public finances and to reduce the crowding out effects that public spending has on private sector economic activity.


Nevertheless, this paper argues for establishing the priority given to defence spending within public spending and national income as a whole.


The previous Labour Government's Green Paper (February 2010) assumed that defence should be planned within the current level of spending or less. I believe that this assumption needs to be explicitly abandoned by the Coalition Government. Defence of the Realm and its interests are a fundamental duty of any Government and a core belief amongst Conservatives.


Defence spending within overall public spending and national income

While it was right to reduce defence spending as a share of GDP after the end of the Cold War from around 5 per cent of GDP, the peace dividend sought in the early 1990s was too great.

The Options for Change White Paper went too far in reducing defence spending in relation to the international risks UK has to recognise and prepare to meet in terms of properly funded defence capabilities.

Having reduced the share of GDP devoted to defence to less than 3 per cent, defence spending after 1997 was subject to a further squeeze that pushed it slightly below 2.5 per cent of GDP in the mid 2000s, despite increased spending resulting from extensive overseas operations.

In my judgement this is an unrealistic basis for defence and foreign policy planning. Historically it is a very low level indeed, apparently lower than the previously lowest recorded proportion of national income spent on defence in 1930 when it was 2.6 per cent.

Not only has defence spending fallen as a share of national income but also as a proportion of total government expenditure. The ONS study in 2009 on public sector output productivity between 1997 and 2007 among other things exemplifies how public expenditure priorities have been changed.

The weight given to defence within General Government Expenditure by sector weight, fell from 15.1 per cent to 11 per cent. What this shows is that during a period when there was increased international risk and with more than two major protracted operations in Afghanistan and Iraq, at a time when public spending was rising rapidly, the priority given to defence was reduced.

In my judgment this priority need to be reversed. It is not a question of affordability but priority within public spending.
The proportion of public expenditure devoted to defence should return to a position that is at least comparable to that in 1997. I believe that the ratio of GDP spent on defence should return to a more realistic level closer to 3 per cent of GDP.

The principle issue about the level of defence spending is not one of affordability, but rather one of deciding political priorities.

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