The biggest news item surrounding the Armed Forces this week is the shock announcement from the Chancellor that whereas the acquisition costs of the Trident replacement were previously expected to be funded directly from the Treasury, now the £20 billion cost should be absorbed by the £36 billion defence budget. At the same time speculation from the more stridently right-wing of Conservative support is reaching a fever-pitch over the possibility of a merger between the Tories and the Liberal end of the Lib-Dem’s.
How could the two be connected?
The answer might be Liam Fox.
When the review into a Trident replacement was being conducted by the previous government there was the explicit understanding that the Defence budget was too small to absorb the cost of without unacceptable impact on conventional capabilities, and given that the deterrent is principally a political tool to achieve diplomatic effect rather than a military tool to achieve battlefield effect, its acquisition costs should be borne by the Treasury.
Prior to this new position from the Chancellor the Defence Secretary had rather nailed his colours to the mast regarding the Deterrent by stating; “that there would be no weakening on Continuous-at-Sea-Deterrence (CaSD) while he led the Ministry of Defence”. Fox also excluded the deterrent from the upcoming SDSR, a decision likewise taken before the Osborne bomb shell, yet now he is being asked to pay for this political tool from his departments shrinking budget, why does this matter so much?
It matters because in making this decision Osborne has created the perfect storm for Defence. Defence has fallen as a priority for government spending since the end of the cold war, falling below the 2.5% threshold considered by Labour to be the sensible minimum at the same time as being tasked with fighting two wars for nearly a decade, during which there has been no reduction in the number of responsibilities the Armed Forces are expected to carry out. In addition to this the Gray report found that the equipment in the procurement pipeline necessary to carry out these tasks was unfunded to the tune of £35 billion over the next decades, and now there is a further £20 billion to be found over a similar time-period to fund the Trident replacement. Bear in mind that the Defence budget itself is only £36 billion a year, and that austerity cuts of around £6 billion (17%) are expected are expected over the course of the coming parliament.
Whereas before Osborne described himself as ‘sympathetic’ to Defence and Education as departments unprotected from the 20% cuts, and whereas Trident’s capital costs were to be borne by the Treasury, now half way through the SDSR Osborne says he see’s nothing special about the Armed Forces situation and throws the Trident costs in for good measure. Osborne has utterly wrecked the financial assumptions that Fox will have been working to in his rapidly tabled Defence Review, and in doing so has left him in a very awkward position politically.
At the same time as this Treasury inspired farce carries on, suspicion from within the Tory right mounts that David Cameron, ever considered to be an ideologically ‘flexible’ politician, is considering the possibility of a merger between the coalition parties, or at the very least fighting the 2015 election jointly as a coalition.
Right now the Liberal Democrats are doing a lot of soul-searching as the the more classically minded liberals engage in an ideological struggle to justify the coalition compromises with their more left-wing SDLP brethren. What is classical liberalism actually about, is it an outdated concept whose value has diminished in the face of modern progressive goals, should the key message now be about fairness, and what in fact is that when translated in policy? This goes on, and becomes ever more torturous and abstracted, but the key message is; that while some in the party are willing to accommodate the coalition to achieve power others are violently against, and the two opinions are polarising within the party.
The Conservatives are facing similar pressures, though not caused by soul-searching so much as visceral anger from the hawkish right-wing of the party at the horrible compromises wrought on a government that needs Tory policies to rectify the chaos of thirteen years of Labour misrule. Why have so few among the Tory right been given Ministerial power within the coalition? What message does it send when progressive-right grandee’s such as Clarke are given Justice? Why was it necessary for Cameron to abandon his six EU policy pledges so thoroughly? What possible need could Cameron have to try and cripple the 1922 committee, what sins does he plan that would require such an authoritarian grip on the party? Above all, why so many ministerial positions and so much policy influence for the coalition partners, are they not the junior of the two and were their ideas not thoroughly rejected at the ballot box?
There is no doubt then Cameron and Clegg will have to manage the mutually extreme wings of their parties if the coalition is to work, this is doubly true as neither can afford to have an election called within the next three years as both have committed themselves to a smaller and less authoritarian state. If the coalition lasts and the policies begin to have effect then they will have buried Labour party hopes at the next election, because the Labour Zeitgeist is inextricably wedded to the big-spending interventionist state, at least for the purpose of this parliament. If the coalition crumbles amid internal tension, and does so before Cameron & Clegg can make the appeal to the electorate; “look what we have achieved”, then the election will be fought amid the divisive chaos of a government that is perceived to have achieved nothing and it will be Labours message that is received; “look at the mess these callous and uncaring laissez-faire capitalists have done, we did warn you!”
Thus the Tory-right is a liability, and Liam Fox represents a threat in that he is amongst the most hawkish of the Tory right, even to the point of being branded a neo-con, and as Defence Secretary he is the highest profile of the hawks. Worse still he has had a stormy relationship with Cameron at least since the appointment without his knowledge of General Dannatt as a Defence advisor, with the favour being returned via the media announced sacking of the previous CDS, and now the Treasury bomb-shell regarding who picks up the Trident tab. If the coalition is to survive long enough for the economic recovery to be felt, and for the big-society to be vindicated, then ideologically driven Tory hawks who reject the progressive europhile politics of the Lib-Dems are a headache that Cameron doesn’t need.
But what if the dynamic duo are plotting a much more dastardly scheme; fighting a joint coalition election against Labour in 2015, or going further still and plotting a formal merger in the parliament following that 2015 election? At that point Fox and his band of “swivel-eyed” malcontent’s are not merely a headache for our ideologically ‘flexible’ Prime Minister, they are an absolute road-block to his ambitions and need to be purged from their position of influence within the Conservative party as soon as is possible. If the idealogical wounds are to heal in time to fight a coalition campaign against Labour in 2015 then purge has to happen soon, and so we come back to the Trident bomb-shell.
If we accept the premise that Cameron’s ambitions are to transform the Conservative party into progressive centre-right party compatible with a remodelled Liberal party then Fox needs to go before he becomes the focus of a Tory rebellion against this great leap forward. Fox, a man who has defined his political career by his affinity to the Armed Forces, and committed himself to the most expensive deterrent option (CaSD) on the assumption that the Treasury was paying, is now in the unenviable position of having to send a wrecking-ball through the military’s conventional capability in order to fund what is in fact a political tool. It is a rank humiliation.
Does Fox have a way out of this trap? Yes, but it does rather depend on the scale of Cameron’s ambitions, specifically whether he is merely strong-arming the obedience necessary to ensure the coalition survives until 2015, or whether he is actively purging the Tory-right in preparation for a coalition election and/or a formal merger.
This blogger is still wedded to the view that Cameron’s main aim is for the coalition to rehabilitate the Lib-Dem’s as a serious party of centre-left politics, and between them to undercut Labour with its big-state fascination as an irrelevance in modern political discourse, thereby draining the poison that causes the left-leaning element of the electorate to viscerally loath the Tory party.
So, is Cameron attempting to suffocate Labour by reforming the left-wing of British politics, or by absorbing the Liberal end of the Lib-Dem’s (while accepting that the SDLP will gravitate back to Labour), and how might we assess which of the two directions is more likely?
If Osborne rediscovers his ‘sympathy’ for Defence and Education then we might well find that the cuts expected from Defence are limited, in return the deterrent is funded by the Defence budget and Fox uses the change to bring it back into the SDSR, thus giving Fox the face-saving formula necessary to back away from CaSD and select a cheaper form of strategic deterrent. It has already been suggested by General Dannatt in his parting statement as Defence advisor, which makes it all the more likely that a cheaper deterrent is the goal rather than Osborne backing down and having the Treasury fund its acquisition, and a cheaper deterrent would sooth the Lib-Dem’s to boot. Under this scenario it is Fox’s obedience that is required, rather than his political assassination, and the assumption would be that the Conservative parties future is still Tory.
If Osborne continues his hard-line against Defence in expecting 20% cuts and absorbing the Trident replacement then it is clear that Fox’s position is untenable, for the man who defined his career by hawkish advocacy of defence & security issues would have as his legacy the wholesale dismantling of the British Armed Forces, the end of strategic power projection, and the demise of Britain as a sovereign power. He would in short be hoist with his own petard resulting from his public commitment to CaSD. Under this scenario we might reasonably assume that political assassination is the goal, removing the head before the greater purge occurs, in order that Dave will have an obedient and conformist party behind him at a joint coalition election campaign in five years time.
This blog is loath to descend into conspiracy theories, and has doubts about the apocalyptic warnings from the Tory-right, however it is clear that Defence is being treated as a political football in a way that will reduce the security owed to the British people, a duty that is supposed to be the nation-states first concern.
n.b. Were this blogger stood in Fox’s shoes, he would use the opportunity offered by Osborne in forcing the deterrent on Defence to include it in the SDSR whilst arguing for the very cheapest option recommended by RUSI; the non-deployed strategic force, which basically means keeping a few warheads in secure storage against future ‘need’. If Cameron then concludes that he would not have enough ‘willy’ to wave at international summits he would be left with the option of telling Osborne to back off, but that is rather predicated on the notion that Fox’s card hasn’t already been punched.
Defence it would appear has become high-stakes in a game of political poker, and we should find out to whom the chips will fall before the SDSR is published in autumn.
Update – 04/08/10
Mr Osborne’s intervention was designed to put Liam Fox, the outspoken Defence Secretary, back in his box. The Chancellor is not Dr Fox’s only headache. The National Security Council, nominally chaired by David Cameron, but in reality the fiefdom of William Hague, the Foreign Secretary, is drawing up Britain’s strategic posture for the future and recently leaked that it wants a leaner, more flexible army. It is hardly surprising that Dr Fox and the MoD feel embattled.