Spending

Wallace: Budget will reveal Sunak’s commitment to increased defense spending

Defense Secretary Ben Wallace said it remains to be seen “how determined” the new prime minister and new chancellor are to increase defense spending to 3% of GDP, as the new leadership team seeks to balance the accounts.

However, he said he was “confident” that there is “recognition that defense is moving up the ladder of funding priorities”.

The Prime Minister and his Chancellor, Jeremy Hunt, are currently considering tax hikes for millions of households and spending cuts to fill a black hole of up to £50billion in public finances.

Earlier on Tuesday, Rishi Sunak told Cabinet members the NHS would be ‘prioritised’ amid ‘tough decisions’ over the next few weeks.

But No 10 refused to commit to a pledge by former Prime Minister Liz Truss to increase defense spending to 3% of GDP by 2030, as Messrs. Sunak and Hunt complete their exam.

In his first leadership bid over the summer, Mr Sunak refused to set “arbitrary” defense spending targets.

Council of Ministers
Prime Minister Rishi Sunak alongside Chancellor of the Exchequer Jeremy Hunt holds his first Cabinet meeting in Downing Street (Stefan Rousseau/PA)

Appearing before the Lords International Relations and Defense Committee, the Defense Secretary said Mr Sunak and Mr Hunt’s commitment to the promised increase would be revealed in the next budget.

When asked how confident he was that the government would be able to sustain the commitment, he said: ‘First of all, I would say that I am confident that there is recognition that defense is progressing in scale of funding priorities.

“To what extent this new Prime Minister and Chancellor are going to be fixed on 3%, we will find out at the level of the budget, where obviously in the OBR you will have to indicate your spending profiles.

“From my perspective, what I would say is that what matters to me is that the next three or four years, I have my spending envelope currently ending in (2024), and this is what our previous calculations (were) based on. .

“So the next two years will really seek to insulate from currency, for example, and even from inflation.”

He also said he would meet with Mr Hunt this week to discuss what the fall budget will mean for his department.

The Cabinet minister said he would like to see defense spending rise ‘significantly’ – but acknowledged he was living ‘in the real world’.

Liz Truss
Former Prime Minister Liz Truss has pledged to raise defense spending to 3% of GDP by 2030 (Stefan Rousseau/PA)

“But I also live in the real world and the next two years there is a spending challenge that we have to overcome.

“I have my envelope. Inflation is my biggest enemy with a capital budget that fluctuates between £15-18bn a year or so. This level of capital, unlike other departments, means that I am particularly vulnerable to inflation and exchange rate pressures.

“So I’d like to get through that and then plan longer term.”

Mr Wallace also claimed that many of his colleagues “wanted to play Top Trumps” with defense investment priorities.

He told the committee, “If we get a lot more money over the next 10 years, do I put more into the air force and less into the military, or do I that I put more in…submarines and more in surface ships?

“It’s an interesting question that never appeals to a lot of people and (it) is important that we ask it in the right place.

“Unless you can afford the mass properly, the question is whether you wouldn’t rather have a perfectly formed, properly defended and capable unit size than a large number of people that we can play games with. Top Trumps?

“A lot of my colleagues want to play Top Trumps. What’s the point of having hundreds of tanks if you can’t protect them? »

Mr Wallace has successfully secured commitments to increase the defense budget under Boris Johnson and Ms Truss.

Mr Johnson initially agreed to raise it to 2.5% of national income by the end of the decade – up from NATO’s 2% minimum – a commitment his successor later raised to 3%.