Disarray on defence poses a competence test for the Chancellor

When the Chancellor stands at the Despatch Box at 12.30 today the Government’s economic competence will be under enormous strain. High unemployment and stagnation dominate and yet pay cuts and road tolling seem to be the medicine on offer. It is not clear how the burden of taxation will be altered but Labour will make clear that at a time when families and public services across the country are suffering it should not be those with the most who are the big winners from today’s Budget box.

Defence isn’t always a big part of the debate on Budget day. Today is different. Firstly we may see monies announced for Forces’ housing in a fanfare of self-congratulation. While any new support would be welcomed it may only be a partial reversal of some of the most unpopular cuts previously announced. But more significantly the Government are presiding over what could be one of the biggest public procurement messes for many decades. Multiple millions of taxpayers’ pounds could be wasted as tens of thousands of our Forces are being sacked and pensions are being permanently slashed. Disarray on defence tells us a lot about the Government’s economic competence.

Britain’s aircraft carrier programme is one of the most strategically important elements of national defence. An aircraft carrier is a floating British airbase; a plot of sovereign land at sea which enables us to project power and rapidly deploy aircraft when and where we need it. Thousands of jobs in the four countries of the United Kingdom are tied to the success and progress of the programme.

Proudly introducing the defence review in October 2010 the Prime Minister announced he planned to build two carriers but use one. He would reverse Labour’s decision to go for one variant of the Joint Strike Fighter jet and procure another. The Prime Minister derided Labour’s previous plans as a ‘mistake’ and promised a superior capability.

So confident was he that he sold the 72 Harrier jets for peanuts to the United States who will use them for spares and did not order a replacement. He also scrapped one of our last aircraft carriers, leaving us with just one, which is now in for repair after hitting a tug. Today Britain has no operational carrier at all.

The scale of Prime Ministerial misjudgement has grown increasingly alarming. During the Libya conflict our allies deployed aircraft from aircraft carriers at will. Ours flew from the UK at huge cost. Senior military figures warn weekly that we would be unable to retake the Falkland Islands. The Prime Minister claimed that his decision to mothball one carrier was forced upon him because it was cheaper than cancellation but the National Audit Office showed this to be entirely false.

Now, and worst of all, the Prime Minister is planning to u-turn on the Joint Strike Fighter. He has spent millions on planes we may neither buy nor fly.

The cost of the u-turn has been identified at perhaps £250m and counting, which would pay the annual salaries of 14,000 Privates or help reinstate all the allowances for frontline Forces which have been cut.

This government’s decisions mean Britain has been left stranded without an operational aircraft carrier. We are without aircraft at sea for a decade and then will only have a part-time carrier unable to work with our allies.

Labour had planned to have planes on carriers all year-round, so we must ask why this happened. The Public Accounts Committee warned of rising costs. The National Audit Office pointed to increased risk and the Government’s “immature understanding” of costs. The Defence Select Committee warned against strategic shrinkage. Cost rose by £1bn over the Government’s predictions of only last September. The chosen planes were prohibitively more expensive than those Labour had preferred. “The last Government got it badly wrong”, the Prime Minister said at the time of the defence review, and yet now he is humiliatingly adopting a lesser version of half of our policy – 11 years late.

The economics of this matter for three reasons. Firstly, a Government cannot be serious about British manufacturing without being serious about the British defence industry, which is the sort to which our economy must be rebalanced, promoting high skilled, advanced engineering. The industry needs certainty, clarity and consistency over the Government’s plans for major projects, not worry and reversals. Ministers are demonstrating a woeful lack of understanding that their own failures to plan impact on industry’s ability to do so too, threatening investment and jobs.

The second issue is waste. A government cutting working and child tax credits cannot waste £250m on a bungled procurement. Having brought forward no meaningful reform, waste in the system continues to rise on major projects. Real empathy with the consequences of decisions being taken would lead to greater care over every penny being spent.

The final reason is trust. The Prime Minister has been cavalier with millions of defence pounds and thousands of jobs and has been found out. If the Government cannot manage an aircraft programme many will ask whether they can be trusted with the economy as a whole.

So when the Chancellor rises today let’s remember that among the many tests he must pass one has been set by his own side – competence. Incompetence has combined with hubris to shatter both the Government’s defence review and defence credibility. Today we will learn whether they can get over this self-inflicted disarray.

Jim Murphy is the Shadow Defence Secretary