Brexit vote could see defence budget reduced

10 July 2016

Brexit could mean defence spending will shrink in real terms despite NATO 2% target, says National Security Strategy Joint Committee.

The changed economic climate following the Brexit vote could see the defence budget reduced in real terms, says the Joint Committee on the National Security Strategy in its report, published today, entitled "National Security Strategy and Strategic Defence and Security Review 2015".

The UK-based Institute for Fiscal Studies (IFS) has highlighted analysis that UK GDP might be reduced by between 2.1% and 3.5% in 2019 as a result of Brexit.

Such a reduction, after taking account of the reduced EU contribution, would imply a hit to the public finances of between £20 billion and £40 billion in 2019–20. In that context, even if the new Government were again to commit to spending at least 2% of GDP on defence, a stagnant or contracting UK economy might mean that the defence budget would be significantly reduced in real terms.

The Committee found that Brexit could impact on the aspirations and capabilities set out in the National Security Strategy. Economic contraction caused by Brexit could limit the ability of the armed forces to fulfil their role effectively.

The Committee had expected the NSS & SDSR 2015 to address what action would be required in the short term following a Brexit vote. The failure to outline a plan to address that contingency indicates the prioritisation of political interests above national security.

If the National Security Strategy is to be credible, it must prioritise the maintenance of national security above political expediency. Planning for a new security review, starting with a detailed analysis of the changed security environment, should begin immediately.

The European Union is facing significant security challenges, such as large-scale migration and an emerging domestic terrorist threat. These challenges also have implications for the UK, regardless of whether it is a member of the EU. A new security review must address how the UK will engage with these issues from outside the EU.

These Brexit-related concerns come on top of the Committee's scepticism about the Government's ability to fulfil the requirements of its defence planning. The Committee thinks it questionable whether Joint Force 2025 will meet the national security challenges faced by the UK.

The report goes on to say that despite the Government's commitment to maintain the size of the Regular Army at 82,000 and to increase the Royal Navy and Royal Air Force by a total of 700 Regular personnel, the manpower fielded by the UK armed forces is inadequate bearing in mind the range, complexity and potential concurrency of tasks expected of them.

In addition, planned reductions in MOD civilian staff could undermine the effective use of the state-of-the-art equipment to be purchased as a result of the NSS & SDSR 2015.

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