Tories in turmoil as Hammond says Cameron hasn't promised to protect defence

Defence Secretary forced to clarify that the PM's pledge to protect spending only applies to defence equipment, not the total budget.

Back in 2010, when David Cameron rather optimistically believed that George Osborne's deficit reduction plan would succeed, he promised Conservative MPs that defence spending would rise in the next parliament. "My own strong view is that this structure will require year-on-year real-terms growth in the defence budget in the years beyond 2015," he said.

With the ever-more hawkish Cameron now talking of a "generational struggle" against African jihadism, Tory MPs and armed forces chiefs have understandably demanded that this pledge be kept. The front page of today's Telegraph suggests that they have succeeded. "No more defence cuts, says Cameron" reads the headline, with the paper reporting that "the Treasury will increase defence spending above inflation from 2015, even as it cuts other Whitehall departments’ budgets." 

But interviews this morning with the Defence Secretary, Philip Hammond, suggest that the pledge isn't as bold as it appears. Hammond told Sky News that contrary to the Telegraph's splash, the promise only applies to defence equipment, not total spending.

"I think what the Prime Minister was referring to was the pledge that was made – which Treasury ministers have repeated – that the equipment plan, the part of the defence budget which funds equipment, will rise by 1 per cent a year in real-terms after 2015. And the Treasury has re-confirmed that commitment since the announcements in the Autumn Statement," he said. In other words, Cameron hasn't ring-fenced defence at all and the cuts (which amount to 7.5 per cent by 2015) will continue.

"I don't expect to be exempt," Hammond said. And with spending on the NHS, international development and schools already protected, it would be surprising if he did. The Institute for Fiscal Studies has already described the likely 16 per cent reduction in spending on non-ring-fenced departments as "inconceivable". Protecting defence would mean even greater cuts to areas like the police, higher education, welfare and local government. 

Quite how Cameron led the press to believe that he had pledged to increase defence spending is unclear. But by reminding his MPs (many of whom are furious that defence has been cut while overseas aid has been increased) that he won't be able to keep his 2010 promise, he has done himself no favours. 

David Cameron meets British soldiers based at Lashkar Gah in Helmand Province, Afghanistan. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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