GDP falls, defence spending falls, in proportion (assuming all other things equal)This confirms my thinking.
Assuming the worst, the Severe Shock scenario, MoD budgets would reduce in line with GDP reductions by 6% in 2018.
The MoD’s 2017/18 budget is stated to be £36 Billion, a 6% haircut would mean the MoD has about £2 Billion less.
The 2010 SDSR by way of comparison, inflicted an 8% budget cut.
Remember, the 6% reduction is based on an ‘all things being equal’ reduction in GDP as represented by the severe shock scenario AND maintaining defence spending at 2% of GDP.
Even if spending were maintained at 2% of GDP, it would still mean a reduction in real terms of 6%, two percentage points better than SDSR 2010.
There are an awful lot of assumptions here, the main one being that the Treasury ‘Severe Shock’ estimate is realised, let’s be honest, it could be worse, it could be better. Many have challenged the assumptions and modelling methods used by the Treasury and it completely discounts any currency or trade positives.
The simple truth is we simply do not know what the future holds for the wider economy but fundamentally, the defence budget is not immune from any rise or fall in our national economic wellbeing.
Would there need to be an SDSR in 2017, not necessarily, although it would seem wise.
The worst case scenario assumes a budget reduction approximately 75% of that in SDSR 2010.
Would we look at the second carrier, F-35B numbers, plans for Apache E, Protector, complex weapons, FCAS, P-8A, Army personnel numbers, Ajax, MIV, Strike Brigades and Project Morpheus, frankly, it would be silly to try and second guess individual cuts because as we know from all past defence reviews, the pain is (adjusted for time) shared equally.
I'm constantly amazed at how the elite and many military professionals are so unable to judge the mood of the people. Do you think that a nation can be at war for over a decade and the masses not get to a point of rejecting it?
The UK will cut its defense spending. Its not even a question. The real question is how much.