George Osborne settles defence budget ahead of Spending Review

A deal was done between the Chancellor and the Defence Secretary to settle the Ministry of Defence's budget for 2015-16 late on Saturday night.

The Ministry of Defence budget for 2015-16 has been agreed ahead of the Spending Review, George Osborne has said.

Speaking on the BBC's Andrew Marr Show this morning, he told stand-in presenter Sophie Raworth that the deal was done "last night" and defended how close to the wire these decisions are being made, saying that "in the past these things were often done the night before the spending round." To stick to his own economic plan, the Chancellor must announce £11.5bn of Whitehall cuts to Parliament on Wednesday.

The cuts agreed to by the MoD will result in the civilian headcount being reduced while the armed forces remain at the same level, BBC Political Editor Nick Robinson reported. Osborne has also said that the fines from the Libor bank interest rate-fixing scandal will go to schemes to benefit war veterans and their families.

Further complications became apparent this morning as seven former defence chiefs published a letter in the Observer, calling on the Prime Minister to resist pressure from the MoD to allow the military to dip into the aid budget to make up shortfalls elsewhere. They describe the ring-fenced aid budget as "critical to the UK's national interests".

Agreeing the cuts to the defence budget was a major hurdle for the Treasury to clear ahead of the Spending Review - as my colleague George Eaton wrote back in February, the idea that the MoD must find cuts while the aid budget remains ringfenced was a difficult pill to swallow for many Conservative MPs.

However, defence is not the last department to settle - Vince Cable's Department of Business, Innovation and Skills is still holding out. On the Marr Show, Osborne claimed that he and Cable were still "arguing about the small details" but denied that there was a "massive argument" going on with his Lib Dem cabinet colleague.

That isn't quite the story coming out of the Cable camp, however - the Observer reports today that the Business Secretary was in "no mood to back down in a dispute he regards as crucial to the government's economic credibility". The problem, it is suggested, is that the differences between Vince Cable and the Treasury run deeper than just quibbles over a few numbers here or there. Cable insists the coalition needs "a strong story to tell on growth" as well as emphasis on the necessity to cut. In accordance with this, he is reportedly pushing for investment in science, skills and training.

This is not a new direction for Cable. In an essay for the New Statesman in March 2013 entitled "When the facts change, should I change my mind?", he set out his hesitations with the coalition's economic policy, particularly in the area of growth and capital spending. He wrote:

The more controversial question is whether the government should not switch but should borrow more, at current very low interest rates, in order to finance more capital spending: building of schools and colleges; small road and rail projects; more prudential borrowing by councils for housebuilding.

Osborne is expected to put some emphasis on infrastructure spending in Wednesday's Spending Review, but Cable seems to be holding out for specific investment for his own department.

Exactly when, and how, Cable and Osborne will be able to resolve what appear to be fundamental intellectual differences, remains to be seen.

George Osborne. Photograph: Getty Images

Caroline Crampton is assistant editor of the New Statesman. She writes a weekly podcast column.

GETTY
Show Hide image

Why Prince Charles and Princess Anne are both wrong on GM foods

The latest tiff between toffs gives plenty of food for thought.

I don’t have siblings, so I was weirdly curious as a kid about friends who did, especially when they argued (which was often). One thing I noticed was the importance of superlatives: of being the best child, the most right, and the first to have been wronged. And it turns out things are no different for the Royals.

You might think selective breeding would be a subject on which Prince Charles and Princess Anne would share common ground, but when it comes to genetically modified crops they have very different opinions.

According to Princess Anne, the UK should ditch its concerns about GM and give the technology the green light. In an interview to be broadcast on Radio 4’s Farming Today, she said would be keen to raise both modified crops and livestock on her own land.

“Most of us would argue we have been genetically modifying food since man started to be agrarian,” she said (rallying the old first-is-best argument to her cause). She also argued that the practice can help reduce the price of our food and improve the lives of animals - and “suspects” that there are not many downsides.

Unfortunately for Princess Anne, her Royal “us” does not include her brother Charles, who thinks that GM is The Worst.

In 2008, he warned that genetically engineered food “will be guaranteed to cause the biggest disaster environmentally of all time.”  Supporting such a path would risk handing control of our food-chain to giant corporations, he warned -  leading to “absolute disaster” and “unmentionable awfulness” and “the absolute destruction of everything”.

Normally such a spat could be written off as a toff-tiff. But with Brexit looming, a change to our present ban on growing GM crops commercially looks ever more likely.

In this light, the need to swap rhetoric for reason is urgent. And the most useful anti-GM argument might instead be that offered by the United Nations’ cold, hard data on crop yields.

Analysis by the New York Times shows that, in comparison to Europe, the United States and Canada have “gained no discernible advantages” from their use of GM (in terms of food per acre). Not only this, but herbicide use in the US has increased rather than fallen.

In sum: let's swap superlatives and speculation for sense.

India Bourke is an environment writer and editorial assistant at the New Statesman.