The Tories are considering cuts to the NHS and overseas aid

Osborne may use next year's Spending Review to remove the ring-fence on health and international development spending.

Ahead of next year's expected spending review (which would cover spending from 2015-2017), the Guardian's Patrick Wintour reports that the Tories are unsure whether they will be able to repeat their 2010 pledge to ring-fence spending on health and international development.

Given the deteriorating fiscal situation, this is no surprise. When George Osborne delivered his first Budget in June 2010, the newly-established Office for the Budget Responsibility forecast that the deficit would fall from £154.7bn (11%) in 2010 to £37bn (2.1%) in 2015. But the failure of Osborne's strategy to deliver growth (indeed, its success in delivering recession) means that, according to the latest independent forecasts, it will now stand at £96.1bn (5.8%).

In response, the Chancellor has already been forced to extend his austerity programme by two years to 2017 (going further, David Cameron has suggested he may need an extra five) and has declared his intention to seek another £10bn of welfare cuts (the reason he tried - and failed - to remove Iain Duncan Smith, who is opposed to further cuts, from his post in this week's reshuffle). With the fiscal situation likely to worsen further as growth remains anaemic or non-existent (the OECD today predicted that the UK economy would shrink by 0.7% this year, a worse peformance than any G7 country except Italy), Osborne is on the hunt for further savings.

Few Tory MPs would weep at the demise of the NHS/overseas aid ring-fence (many were outraged that defence spending was cut by 7.5%, while overseas aid received a 35% real-terms increase) but such a decision would inflict further damage on Cameron's brand. Against this, the Tories believe that a 2013 spending review would cause trouble for Labour by forcing it to come clean about where it would cut. As Treasury select committee chairman Andrew Tyries has said: "Labour would have to respond. Having the coalition parties committed to the same spending path halfway into the next Parliament makes it very difficult for Labour at the election."

The biggest question facing Balls and Miliband remains whether to accept the Tories' spending plans, as Labour did in 1997, or offer a distinct alternative.

George Osborne arrives at Downing Street yesterday for the first cabinet meeting since the reshuffle. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Saudi Arabia is a brutal and extremist dictatorship – so why are we selling it arms?

With conflict in Yemen continuing, it’s clear that we’re failing to moderate the actions of “our despots”.

This year, during Pride week, I noticed something curious on top of the Ministry of Defence just off Whitehall. At the tip of the building’s flagpole hung the rainbow flag – a symbol of liberation for LGBTIQ people and, traditionally, a sign of defiance, too.

I was delighted to see it, and yet it also struck me as surprising that the governmental headquarters of our military would fly such a flag. Not only because of the forces’ history of homophobia, but more strikingly to me because of the closeness of our military establishment to regimes such as Saudi Arabia, where homosexuality is a sin punishable by jail, lashing and even death

That relationship has been under the spotlight recently. Ministers writhed and squirmed to avoid making public a report that’s widely expected to reveal that funding for extremism in Britain has come from Saudi Arabia. The pressure peaked last week, after a series of parliamentary questions I tabled, when survivors of 9/11 wrote to Theresa May asking her to make the report public. At the final PMQs of the parliamentary term last week, I again pressed May on the issue, but like so many prime ministers before her, she brushed aside my questioning on the link between British arms sales and the refusal to expose information that might embarrass the Riyadh regime. 

The British government’s cosy relationship with Riyadh and our habit of selling weapons to authoritarian regimes is “justified" in a number of ways. Firstly, ministers like to repeat familiar lines about protecting British industry, suggesting that the military industrial complex is central to our country’s economic success.

It is true to say that we make a lot of money from selling weapons to Saudi Arabia – indeed figures released over the weekend by the Campaign Against Arms Trade revealed that the government authorised exports including £263m-worth of combat aircraft components to the Saudi air force, and £4m of bombs and missiles in the six months from October 2016.

Though those numbers are high, arms exports is not a jobs-rich industry and only 0.2 per cent of the British workforce is actually employed in the sector. And let’s just be clear – there simply is no moral justification for employing people to build bombs which are likely to be used to slaughter civilians. 

Ministers also justify friendship and arms sales to dictators as part of a foreign policy strategy. They may be despots, but they are “our despots”. The truth, however, is that such deals simply aren’t necessary for a relationship of equals. As my colleague Baroness Jones said recently in the House of Lords:

"As a politician, I understand that we sometimes have to work with some very unpleasant people and we have to sit down with them and negotiate with them. We might loathe them, but we have to keep a dialogue going. However, we do not have to sell them arms. Saudi Arabia is a brutal dictatorship. It is one of the world’s worst Governments in terms of human rights abuses. We should not be selling it arms.”

With Saudi Arabia’s offensive against targets in Yemen continuing, and with UN experts saying the attacks are breaching international law, it’s clear that we’re failing to moderate the actions of "our despots".

The government’s intransigence on this issue – despite the overwhelming moral argument – is astonishing. But it appears that the tide may be turning. In a recent survey, a significant majority of the public backed a ban on arms sales to Saudi Arabia and just this weekend the Mayor of London denounced the arms fair planned in the capital later this year. When the government refused to make the terror funding report public, there was near-universal condemnation from the opposition parties. On this issue, like so many others, the Tories are increasingly isolated and potentially weak.

Read more: How did the High Court decide weapon sales to Saudi Arabia are lawful?

The arms industry exists at the nexus between our country’s industrial and foreign policies. To change course we need to accept a different direction in both policy areas. That’s why I believe that we should accompany the end of arms exports to repressive regimes with a 21st century industrial policy which turns jobs in the industry into employment for the future. Imagine if the expertise of those currently building components for Saudi weaponry was turned towards finding solutions for the greatest foreign policy challenge we face: climate change. 

The future of the British military industrial establishment’s iron grip over government is now in question, and the answers we find will define this country for a generation. Do we stamp our influence on the world by putting our arm around the head-choppers of Riyadh and elsewhere, or do we forge a genuinely independent foreign policy that projects peace around the world – and puts the safety of British people at its core?

Caroline Lucas is the MP for Brighton Pavilion.