Ben Wallace: £24bn funding boost is enough to fill MOD blackhole

‘I don’t know where we are going to get the money’: Defence Secretary Ben Wallace admits he has no idea how the Government will fund the MOD’s £24BILLION budget increase as COVID crisis leaves Britain with its highest national debt since 1960

  • Boris Johnson has announced a £16.5 billion funding increase for armed forces
  • The extra cash is on top of previous spending pledge, taking boost to £24 billion
  • But there are major questions over where Government is getting the money from
  • Ben Wallace today admitted ‘I don’t know where we are going to get the money’

Ben Wallace today admitted he does not know how the Government will fund a £24 billion budget boost for the Ministry of Defence amid fears UK foreign aid spending will be raided.

Boris Johnson has announced the armed forces will receive an extra £16.5 billion over the next four years on top of a previous Tory commitment to raise defence spending annually by 0.5 per cent above inflation. 

Mr Wallace said this morning the ‘very large settlement for defence will allow us to fix the problems we have inherited’ as well as providing ‘headspace to modernise our forces’. 

However, the Defence Secretary conceded the additional cash will only be enough for the military if it ‘tailors’ its ambitions in the coming years as he also admitted he is unaware where the money is coming from. 

Mr Wallace was repeatedly asked if some of the new cash will be taken from international development spending but he would not be drawn as he said that was a matter for Chancellor Rishi Sunak who is due to set out his one-year Spending Review next week. 

Mr Wallace said: ‘I don’t know where we are going to get the money insofar as I don’t know whether the Chancellor has made a decision on the foreign aid budget or other budgets. That will be revealed next week.’  

Mr Johnson last night vowed to end the military’s ‘era of retreat’ as he unveiled the largest investment in the armed forces for three decades.  

It is understood the announcement comes after Mr Johnson overruled Mr Sunak who wanted to give defence a 12-month increase worth just £1.9billion. 

The bigger settlement will be spent on a ‘space command’ that could launch Britain’s first rocket in 2022, research on ‘blue-skies’ projects and investment in a new Tempest fighter.

Billions will also go on artificial intelligence and the creation of a National Cyber Force of hackers trained to tackle online threats from Britain’s enemies. 

The cash pledge came a day after Air Chief Marshal Sir Mike Wigston, the head of the RAF, warned that wars of the future may be won or lost in space.

Defence Secretary Ben Wallace today admitted he does not know where a £24 billion funding boost for the MOD will come from

Boris Johnson, pictured on Salisbury Plain in September last year, has promised the armed forces an extra £16.5 billion over the next four years on top of an existing Tory commitment to increase annual spending by 0.5 per cent above inflation

What’s in Boris’s war chest? 

  • An extra £1.5billion will go on military research and development. Experts will be encouraged to come up with innovative ideas to shape the future of the armed forces.
  • Investment in the Tempest fighter planned to replace the Typhoon. Expected by 2035, it will be capable of being operated by a pilot or flying unmanned.
  • A ‘space command’ staffed by all three Armed Forces will tackle the threat from nations developing anti- satellite weapons such as China and Russia. It will also use a rocket to ferry military satellites into orbit.
  • A National Cyber Force of 500 specialists from the MoD and GCHQ will defend Britain against hostile states and terror groups online.
  • An artificial intelligence agency specialising in autonomous machines.

There are growing fears over the state of the public finances after the Government borrowed tens of billions of pounds to prop up UK plc during the coronavirus crisis. 

The UK’s national debt hit a record £2.06 trillion in September as borrowing hit 103.5 per cent of gross domestic product 

The public sector debt to GDP ratio is now at its highest level since the 1960s and Mr Johnson’s extra cash for the MOD will only increase concerns about how Britain will pay for the spending.   

The cash boost announced by Mr Johnson takes the total defence budget to £45billion this year, meaning Britain will continue to be the largest defence spender in Europe and the second-largest in Nato.

Mr Johnson’s spending announcement came as he warned that Britain faced a ‘more perilous’ situation than at any time since the Cold War.

He added yesterday: ‘I have taken this decision in the teeth of the pandemic because the defence of the realm must come first. 

‘The international situation is more perilous and more intensely competitive than at any time since the Cold War and Britain must be true to our history and stand alongside our allies. To achieve this we need to upgrade our capabilities across the board.

‘This is our chance to end the era of retreat, transform our armed forces, bolster our global influence, unite and level up our country, pioneer new technology and defend our people and way of life.’

Mr Wallace today insisted the extra money will be enough to fill the MOD’s budget blackhole. 

He told Sky News: ‘First of all, it is enough. It is actually, if you take our 0.5 per cent manifesto commitment it is a £24 billion boost overall, it is £16.5 billion on top of what we have already committed in our manifesto.

‘It is enough depending on how your ambition is tailored. I have been very clear as Defence Secretary that one of the failures of the past reviews was our funding never matched our ambition.

‘That goes for most of the reviews of the last 40 years. This means that we can have a proper discussion about what are our global ambitions and how are we going to fund it.

‘This very large settlement for defence will allow us to fix the problems we have inherited, the blackhole that the NAO obviously identified, and allow headspace to modernise our forces.’

However, there are major question marks over where the extra money will come from amid growing speculation that at least some of it could be taken from the UK’s aid budget. 

Mr Wallace told Sky News: ‘The overall decisions fall, the whole of the Government budget will be obviously revealed next week during the spending review announcement by the Chancellor and I am not going to preempt the Chancellor.

‘Obviously the Chancellor has to find money from across the taxpayer, the Government.

‘He will have made those decisions and the Prime Minister will direct the priorities. Where it comes from is obviously within that total overall envelope.’

Mr Wallace was repeatedly pushed on where the money is coming from as he said: ‘Do I support more money for defence? Yes, I do. That is why I put in for a bid. Did I get it?

‘Where it comes from is a matter for the Chancellor. We all want lots of things in life, we all want lots of things across the Government, we have spent £200 billion of taxpayers’ money responding to Covid.

‘It is really a matter for the Chancellor and the Government where they get the money from. I don’t suspect it will be raided from a whole load of other budgets across the board, it will be taken as a result of the measures we can.’

The Defence Secretary was also grilled on the issue during an interview on ITV’s Good Morning Britain programme as he was asked why the UK would cut foreign aid at a time when so many developing countries are struggling because of the pandemic. 

He said: ‘I don’t know where we are going to get the money insofar as I don’t know whether the Chancellor has made a decision on the foreign aid budget or other budgets. That will be revealed next week.’ 

Ministers are said to be considering cutting the UK’s foreign aid commitment from 0.7 per cent of GDP to 0.5 per cent. 

The prospect of a temporary cut to international help has prompted a Tory backlash, including from former prime minister David Cameron, with many backbenchers adamant the current aid spending target must be maintained. 

No 10 has warned that threats to the nation will no longer be confined to distant battlefields. Instead, Britain’s enemies could reach people ‘through the mobile phones in their pockets or the computers in their homes’. 

It added: ‘UK defence therefore needs to operate at all times with cutting-edge technology. This reverses the systematic decline in this crucial area in the last 30 years.’

The PM’s announcement comes after Mr Johnson overruled Rishi Sunak who wanted to give defence a 12-month increase worth just £1.9billion

The money will be used to fill the armed forces’ budget blackhole and find new technologies. Pictured is an illustration of a laser weapon destroying a satellite in outer space

Whitehall sources claimed the Mr Johnson wanted to show US president-elect Joe Biden the UK was a dependable ally, and No 10 said the money would ‘demonstrate to our allies they can always count on the UK’.

The MOD has spent a year on an ‘integrated review’ of the threats facing Britain and how the Government plans to tackle them. 

Mr Johnson had told Mr Sunak that the armed forces needed an extra £15billion, but Mr Wallace fought for more over fears that the Ministry of Defence could end up with barely enough to fill its funding deficit. Insiders claimed it needed £20billion to modernise.

In a victory for Mr Wallace, the MoD will now receive £16.5billion above the Tories’ manifesto commitment over four years.

The Government had pledged to raise spending by 0.5 per cent above inflation for every year of this Parliament. The total amounts to £24.1billion more. 

No 10 estimates the extra MOD spending will help to create 10,000 jobs annually. 

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