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.

Dr Robert Crowcroft, Research Associate, UK Defence Forum

The blunt truth is that the SDSR process has not been a strategy exercise. The review was conducted with such speed that attention within the MOD and the Armed Services focused on where the axe will fall, not geopolitics and policy responses. Nor has there been time to convincingly reform the badly mismanaged procurement policies of the MOD. Fundamentally, the SDR has been a political exercise with spending as the bone of contention and – most important of all from the perspective of those ministers involved – personal credibility riding on the outcome. It is a personal and party struggle, not a clash over policy itself. The purpose of this essay is to highlight the high political context in which Britain's national security strategy has been created.

Since taking office in May, the Defence Secretary, Dr Liam Fox, has been engaged in a long and at times fairly brutal power struggle with George Osborne, the Chancellor. The SDSR was supposed to provide a coherent framework for future defence policy but swiftly became a guerrilla conflict to ward off the Treasury's crusade for drastic cuts. Fox found himself immersed in a bureaucratic turf war with Osborne; a turf war in which the fortunes of both men was intimately bound up. One imagines that private meetings between the two have been angry affairs. Politically, the SDSR runs along a fault line within the Conservative party that has absolutely nothing to do with defence policy: specifically the mistrust of the 'Cameron project' and widespread disappointment that the election in May did not generate a Conservative parliamentary majority.

There are multiple ambitions at work here. Osborne's agenda is that he has to confound the doubters and prove himself a successful Chancellor. His political skills, highly rated by some, have long been questioned by others. His priority is to 'save the economy'; only by being able to make that claim will Osborne justify his billing. He simply has to pull it off. And the job is not just an opportunity, it is also fraught with danger. It is just as likely that the Chancellor will end up shipwrecked, either from an unresponsive economy or through bearing the opprobrium for painful cuts. To avoid this, he first needs to rein back state spending by every penny he can find, and secondly target the cuts smartly, on things which do not impact the daily lives of the public – like defence.

Osborne is also part of the Cameron faction of the Conservative party – tolerated but never loved by most MPs and activists. A second agenda in his rivalry with Fox has been to try and discredit the Defence Secretary as part of an internal Tory power struggle. Fox taps into a middle-class, no-nonsense strand of Conservatism that Cameron and Osborne struggle with: both are too cosmopolitan, and physically too baby-faced, to strike a chord. It is well-known that Cameron and Osborne do not like Fox, to say the least. Keeping people such as him from becoming a threat requires careful management, cunning, and a willingness to plunge the dagger in if it arises. The Cameroons clearly revelled in reports that Fox was struggling at the MOD in his first months. There is a clear 'win' to be had if Fox is seen to fail, or loses credibility in the eyes of the party. Defeating Fox is a crucial task in consolidating the Cameroons' hold on the party at a time of growing discontent over the alliance with the Liberal Democrats. Others who could theoretically be a threat have either shot themselves in the foot (David Davis), or been cleverly co-opted by Cameron as an air-raid shelter (William Hague).

The Conservative party must surrender to the Cameron agenda if the Coalition is to be a success, and it is by no means clear that it will do so. There are always plenty of people waiting in the wings – whether the ambitious or the bitter – who look for 'issues' and 'crises' to use as platforms to boost their position. Many such platforms will be available in the coming year, especially with the imminent Comprehensive Spending Review and future government legislation. Spiking the guns of someone like Fox would be both personally helpful to Osborne, and beneficial in party management terms to Cameron.

Fox, meanwhile, had ambitions of being Tory leader at one point, and he may still harbour them. A future lurch away from Cameron may see Fox become an acceptable candidate for the party. Whatever his plans, to fulfil them Fox must be a successful minister. He can't be seen to fail and therefore defeat to Osborne was unthinkable. In July, Fox went public with the battle and warned Osborne not to 'play fast and loose' with national security when the Treasury sought the shift the cost of the Trident replacement to the main defence budget. The overt posturing continued until early October and the leak of a private letter from Fox to Cameron warning of 'brutal' political consequences if 'draconian' cuts were imposed – swiftly bolstered by hints that Fox himself would resign. This forced Mr Cameron to come to the MOD's aid. Fox played it cleverly, outflanking Osborne on ground which resonates with the Conservative party and bouncing the Prime Minister into helping him by loudly emphasising the damage that Mr Cameron will sustain if he did not. For the Prime Minister, political good health was more important than destroying an enemy. Fox calculated this and by last week, he had won: Osborne's desired cuts of at least ten percent were reduced to just seven percent – still a significant fall of the axe, but not as bad as it could have been. In this staring contest, Downing Street and the Treasury blinked first. On 14 October, Fox was scheduled to attend a NATO meeting in Brussels, but decided to remain in London in order to consolidate his victory over the Treasury.

Where is the defence policy in all of this? Well, it isn't really there – and that's the point. The SDSR process has been carried out at great speed, and proved to be more of a budget battle than an analysis of Britain's needs. For instance, Fox's success, though on the surface a victory for 'security' over 'cuts', is not necessarily a victory for strategic good sense. Fox appears to be quite happy for the Navy to bear the brunt of the cuts, with a surface fleet slashed to just twenty vessels. To this author at least, that is a disturbing policy.

Mr Cameron's recent measures –the appointment of his own military adviser, and taking on the job of personally unveiling the SDSR– signal that the war with Fox is far from over. The Prime Minister does not want it to appear that the Defence Secretary has established his own personal fiefdom in defiance of Downing Street. On 18 October there were stories in the newspapers about Fox's partying lifestyle and drinking habits, which Fox quickly labelled a smear by internal enemies. Cameron would doubtless like to trap and maim Fox, but the indications are that he is too afraid of sustaining political damage if he supports Osborne, and has chosen to spare the military even if it means that Fox escapes the Treasury hounds. The Defence Secretary rubbed salt in the wound by gleefully telling the BBC that 'Well, I think it's always helpful to have the Prime Minister on your side in any spending round. And it's very clear that the Prime Minister himself is very committed to the Armed Forces'.

The result will be that Fox emerges looking triumphant, strong willed, and resolute: sure to chime well with a frustrated Conservative party. No doubt Cameron, Osborne, and their Notting Hill mafia will seek future opportunities to send out the hounds; and Fox's next challenge will be converting this victory into broader personal success. But, for now at least, the wily Defence Secretary has outsmarted his opponents. Where that leaves Britain's international strategy does not appear to be on the agenda.

Robert Crowcroft is a Research Associate at the UK Defence Forum and a specialist on British politics and defence.

The backgorunder to the Strategic Defence and Security Review - the National Security Strategy can be read here.

By Ian Shields, Research Associate, UK Defence Forum

On 10 October the Prime Minister presented to Parliament the National Security Strategy (NSS), titled "A Strong Britain in an Age of Uncertainty". This article will examine the Strategy's contents, and ask to what extent it achieves the aim of the introductory statement that "the security of our nation is the first duty of government. It is the foundation of our freedom and prosperity".

First, then, the contents. There is a disappointing but unsurprising number of criticisms of the previous administration that reek of party politics ("Unlike the last Government, our strategy sets out clear priorities" – p.5 – for example) when national security should be above such squabbling. The Strategy highlights the formation of the National Security Council, and explains how this will function in terms of reviewing the Governments list of security challenges, drawing together expert advice and offering broad changes in direction: all good, strategic stuff. It lays out, very clearly, in Section Three (see especially p.27) what are seen as the current priority risks, grouped into three tiers of importance. The highest tier comprises international terrorism, cyber attack, a major accident or natural hazard, or an international military crisis that draws in the UK. These are all entirely reasonable, and with the promise that the list will be kept under constant review and formally refreshed every second year, a sensible and open method of identifying threats. A state-on-state threat to the UK is, entirely reasonably, afforded lower priorities (a Tier Two threat if using chemical, biological, radiological or nuclear weapons, Tier Three if conventional weapons only are employed in attacking us).

Much is also made of alliances, with the relationship with the US stressed as remaining the most important (see p.4) followed by the EU and then NATO. Again, this is entirely sensible and in keeping with the theme of living in a globalised world, and the new demands (and, therefore, security challenges that we face). The other broad theme that runs through the Strategy is the need to harness all the levers of national power (with particular emphasis on the diplomatic) to secure Britain's place. And finally, this NSS stress that it addresses only the ends and ways, the means being left to the Strategic Defence and Security Review (SDSR). Given that the SDSR deals with more newsworthy items such as troop numbers, ship orders and air base closures, and was to be seen as an element of the Government's spending plans, it is unsurprising that the SDSR has received much more attention than the NSS; whether this emphasis of public review is correct is less clear.

Having made the link between the NSS and the SDSR, and having claimed that the NSS sets the strategic direction and boundaries within which the SDSR should operate, it is clear that one should follow the other, and that they should be read in conjunction with each other – for without a strategic direction, how can the SDSR match the necessary means to achieve the ends and ways, particularly when defence procurement is itself so drawn out, and therefore requires a clear strategy?

And it is here that I start to struggle with the NSS. For the SDSR to have real meaning, the NSS must and should be the leading document, yet it has received scant attention in the blaze of publicity surrounding the spending announcements. The NSS makes much of our strength as a trading nation, with the added bonuses of English being the world's lingua franca for trade, and our geo-temporal positioning as part of Europe and straddling the time differential between the Far East and the US. But what is left unanswered is the key question of what role does Britain foresee herself playing in the future? While the NSS is strong on identifying some of the challenges the world faces in a globalised era, including such extremes as climate change and international, ordered crime, it singularly fails to give a clear articulation of the role this Government expects the UK to play, beyond some fairly broad, even banal, statements about maintaining order and upholding rights. And of equal concern is that this document claims to be a strategy, but looks forward little more than five years (convenient since that equates to the life of a Parliament, but hardly strategic in time-scale). It contains some well-crafted rhetoric, but gives little feel as to how or why further change might occur, how this might affect the UK, and what the country might do to influence the course of events in Britain's best long-term interests.

The Government is to be applauded for going as far as it has in producing this NSS, but it leaves too many nagging doubts. Has the Government really got a clear view on the likely course that world events will take? Does it see the world being uni-polar or multi-polar in the future? What will Britain's relationship to major, and regional, powers be? What is the most likely role for the EU, for the UN, for NATO, what part will we play and how will we influence their direction of travel? And w(h)ither our relationship with the US? Perhaps this was just too rushed; perhaps, since it is the first attempt at such a strategy, it is only a starting point; perhaps there is another, classified document addressing such questions. But perhaps it is also something of a missed opportunity....

I suspect that Pitt the Younger, one of William Hague's great heroes from history, had a clearer idea of the country's strategic direction when he came to power (and I am not referring to the period of the Napoleonic wars, but before those conflicts started); having carefully read this National Security Strategy I am unsure where the Government intends Britain to head, or how it envisages us reaching this undefined Nirvana.