This week’s review of Britain’s defence spending is the opening salvo of the coalition’s plans to review spending across government. David Cameron and George Osborne have walked a finely balanced line of compromise to appease the defence establishment, argues Chris Brown. But this approach has led to a raft of unsustainable proposals that, in the end, leave key issues to be resolved later on.

Defence Reviews follow a fixed pattern. They always begin with a firm statement that everything is up for grabs, there are no sacred cows, there will be no salami slicing of budgets etc. And they always end with a compromise in which the sacred cows survive, losses are carefully portioned out between the services, and salami is indeed on the menu. The 2010 review has been no exception. Each of the services has been required to make sacrifices. But the kind of radical decisions that were promised have not been made. In particular, the implications of the National Security Strategy (NSS) that was set out on Monday have been trumped by the felt need to keep all the service interests on board.

The one incontestably sensible proposal. that is in line with the NSS, is to increase spending on Special Forces (the SAS and the Marine equivalent, the Special Boat Service). They are the one branch of Britain’s armed forces that actually gets stellar reviews from our allies and their expansion is obviously valuable in meeting the Tier 1 threat posed by terrorism.

On the other hand the possibility of a large scale conventional war was ranked as only a Tier 3 threat by the NSS document. Yet instead of scrapping the army force of 400 main battle tanks designed to meet this threat, the Army has been allowed to keep half of them. In addition though, as a compromise within a compromise, the Army has lost its training grounds in Germany.  Meanwhile the RAF will keep some of its now aged Tornados while waiting for the Joint Strike Fighter (JSF) to arrive. But the air force will lose several bases (some of which are to be turned over to the army to house the 10,000 troops returning from Germany).

The worst product of all the bargaining is the deal that has been struck at sea. The navy has kept its two big carriers, but the first (HMS Queen Elizabeth) will be mothballed when the second (HMS Prince of Wales) is ready for active service. In the meantime HMS Ark Royal and its  Sea Harriers will go, so neither of the new ships will have any fighters left to fly off them for a decade.  As the price for the ‘success’ in keeping the carriers the navy has had to accept major cuts in the rest of the surface fleet, leaving it with barely enough frigates and destroyers to form a plausible carrier group, even if it had plausible carriers.  Middle rank and junior Navy officers are in despair at what their seniors have agreed to. It may be that it really was impossible to cancel the contract, and so these white elephants had to be built. But in that case getting rid of the Sea Harriers before the JSF fighters are available makes little sense. In fairness, this is a problem that the Conservative-Liberal Democrat coalition inherited from the last Labour government, but this still looks like a mess.

Very interestingly, in principle a like-for-like Trident replacement remains on the books. But the key decision to give the final go ahead for the new submarines has been postponed until 2016, with the new boats coming on line in the late 2020s.  This is a postponement that the Liam Fox and Department of Defence have been saying was impossible because the existing boats couldn’t be extended and the capacity to build the new ones will be lost. But I predicted in an earlier blog that this was the path that the coalition would start down, if it didn’t have the willpower to defy traditionalist Tories and scrap the project altogether.

In total, the cut in defence spending will be around 8 per cent, much less than originally planned, but still bringing the total spend to just about 2 per cent of GDP (or just under, depending on how some marginal items are counted). This is a historic low point – too low in fact to preserve the ‘full spectrum’ of forces that the government is claiming it will still possess.

All in all, the Times description of this as a fiasco seems a little generous.  So how did this outcome happen here? Clearly the Defence Secretary, Dr Liam Fox, has adopted a hard line, with letters leaked and implicit resignation threats. Last week the top brass, in full uniform, medals and all, descended on Downing Street to put the frighteners on the Prime Minister.  In the short term, this worked. The Treasury are clearly unhappy, but the PM could not contemplate mass resignations and so the defence establishment were able to deflect some of the pressure away from their budgets.

But Dr Fox and the brass should remember the words of the American baseball sage Yogi Berra that: ‘It ain’t over till it’s over’. And when it comes to defence spending, it’s never over.  Defence Reviews are supposed to set priorities and establish the pattern of spending, but lots of important decisions are taken between reviews. And given the incoherence of the decision-making this week it would be surprising if many of the issues were not returned to later.

Consider the two carriers for example: the original idea was that they would take the absurdly expensive short take off and vertical landing (STVOL) variant of the Joint Strike Fighter. Now it seems that the second carrier, the one that it isn’t intended to mothball or sell to another country, will be fitted with a catapult and landing hooks that would make it possible for it to take the marginally less expensive regular version of the JSF.  This, it is proudly announced, would also make it ‘interoperable’ with the French Rafale fighter and other NATO warplanes.  All very true. But it would also make it much easier to sell to a third party, if it were later to be considered surplus to requirements.  Remember HMS Hermes from the Falklands campaign? It is now the INS Viraat and due to be retired from the Indian Navy in the late 2010s.

And the Trident replacement?  I remain unconvinced that Cameron and Osborne share Fox’s enthusiasm for this project.  The delay to the programme means they can come back to it at a later date, and I predict they will.  At the moment, with all the controversies that are going to be generated elsewhere this week, threats of resignation were effective. But at some future date this may not be the case.  And relations between Fox and the Prime Minister and Chancellor were never good, but they now will be much worse than they were.  Somewhere down the line, Liam Fox may have cause to remember another American saying – “Payback’s a bitch”.

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