‘Labour needs a Ministry of Military Supply’

It is reported that the Chancellor will not commit to spending 3% of GDP on defence by 2030 in his Budget in October. The decision on this commitment has been deferred to a spending review next year. A virtue can be made from this delay because substantial reform is required first. Failing to grasp the nettle will both risk national security and seriously damage Labour’s reputation as a party that can be trusted on defence.

The Ministry of Defence (MOD) faces an increased security threat without the full funding to meet it. It has a reputation for wasting taxpayers’ money on large pieces of military hardware which cost too much. This combines with a record of acquiring hardware which does not deliver as promised.

Finding the funds is the Treasury’s job. But the other two challenges, efficient and effective defence spending, should not be the responsibility of the MOD. For the sake of the nation’s security, and before the Chancellor allocates any more money to defence, Andy Burnham should be radical and split the department.

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The defence spending debate has been shaped by the Strategic Defence Review, published last year and already dated, and the Defence Investment Plan, released in July, which sets out how to pay for the recommendations. The DIP falls far short of the funding required; a result of difficult negotiations with the Treasury. However, this is not an exception. The 10 year Equipment Plan published in 2023 came with a built in shortfall of £17 billion, and defence spending is usually underestimated. On the evidence, the Treasury is right to hesitate before upping spending because no one should believe the MOD’s figures anyway.

The MOD’s duty is to set out what we need for security reasons and deliver that security, and politicians need to work out how to fund it. But it is not even clear the department for our defence is good at predicting future defence needs. If it was, the UK would have the shells and missiles and air defences and drones we clearly need; but we do not.

The MOD’s poor procurement reputation is well deserved, and contrasts with the dedicated commitment of armed forces personnel. Type 45 Destroyers were insufficiently powered, requiring lengthy and extensive refits with most currently in port. Submarines have been stuck at base for maintenance, rather than defending the nuclear deterrent, aircraft carriers, and undersea communications. We still do not have the full complement of F35 fighter jets. The MOD was warned by the National Audit Office not to set “demanding and unachievable sets of requirements” for armoured vehicles but with the Ajax project it did just that: soldiers’ health has been damaged from noise and vibration, and the vehicle is still not ready.

In each case, and in others too, billions have been wasted, often as good money has been thrown after bad with promises to learn lessons. There will have been compelling reasons for spending more to put things right, no doubt with claims that success was imminent; just as a gambler decides to double down. Attempts to reform procurement have clearly been insufficient. Still it continues and, open-eyed, mistakes are repeated. The government itself rates the risk to most major projects as red or amber.

We are told we are effectively at war already, with a full-blown conflict possible by 2030. Either we need to be ready for war (or to deter it), or we do not. Everything else, however inconvenient or challenging, flows from there.

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In 1915, a few months into the First World War, the Army faced an equipment shortage known as the “shell scandal”. The War Office was not up to procuring materiel in war time or predicting the Army’s future needs, risking failure on the battlefield.

Urgent action was required rather than more of the same. The Prime Minister, HH Asquith, created a new, and unconventional, Ministry of Munitions, headed by David Lloyd George who moved from being Chancellor of the Exchequer.

Lloyd George recruited experienced people from business who actually ran things, could improvise, and would make things happen. He agreed long term contracts with defence companies, promoted innovation, and took advantage of far-ranging powers to ensure the supply of munitions specified by the armed services or, as he determined, “may otherwise be found necessary”. This was “mission-led” government in action, with political leaders focused on and driving clear outcomes. Into the Second World War an equivalent department, the Ministry of Supply, was created, servicing the British Army and Royal Navy.

Labour should learn from history and reorganise government accordingly. It should separate the Ministry of Defence into a department focused on defence and fighting, and a department focused on procurement and supply.

The alternative is more of the same with years of failed procurement, overspending, billions wasted, and security compromised. This is a social justice issue too: with limited resources, what we waste on poor defence spending is what we do not spend on our public services or tax cuts that cannot happen.

Defence should get extra money to meet the threat, but a new cabinet member, leading a new Ministry of Military Supply, should be spending it.

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