Cuts to Whitehall departments to fund the delayed defence investment plan (Dip) would be a “zero sum game”, a senior Ministry of Defence official has warned.
Rupert Pearce, UK national armaments director, told peers the delay in publishing the Dip was “regrettable”, but added reducing spending in areas such as energy or transport investment “could come back to haunt us in defence”.
Appearing before the Lords International and Defence Committee, Mr Pearce said: “If you can’t borrow and you won’t tax, it becomes a zero sum game when, for defence to get more money someone else must lose, and that’s a very difficult decision to make politically.
“It’s not one I obviously have to make, but also remember that our resources are described as a percentage of growth.
“If we kick the legs out of growth investments by other ministries in energy or transport and so on, actually that could come back to haunt us in defence, and we want our economy to be as strong as possible.
“I’m a firm believer that one of the best forms of deterrence is a strong economy, so we need to think of this holistically as well, which is what makes this so difficult.”
New Defence Secretary Dan Jarvis has vowed to get the armed forces the funding they need after his predecessor quit over the issue.
John Healey and armed forces minister Al Carns resigned over the proposed funding for the Dip, saying the planned amount was “well short of what’s required”.
Mr Pearce highlighted the urgent need to boost defence spending as a percentage of GDP as a key challenge because of “enormous intensity at the front end of the plan”.
He said: “The Dip is a big challenge in an environment where money is in short supply, we can’t grow our way economically out of this, and that’s the constraint.”
Describing the Dip delay as “very regrettable”, Mr Pearce suggested it could have an impact on the UK’s reputation.
He said: “I think it goes to reputation with industry, with our allies – everybody is waiting for this to come out, and I want to get out there with the dip, and I want to have discussions with industry about how we can move fast, and we can be partners.
“I want to roll my dip out over the top of the dip equivalent of my allies and say, gosh, look, this is where we’re doing things together, we can do things together – look, you do this, I do this, we can move in a multilateral basis for our allies as well.”
Mr Pearce said the need to increase defence spending was his main focus, with time running out to increase military capability in response to the threats facing the UK and allies.
He said: “The biggest issue I face is I’m very conscious we don’t have a lot of time to transform our armed forces.
“They are, to some extent, hollowed out. They need to be grown, regrown.
“We also need to engage in a complete transformation of the nature of their capabilities to be ready for the war that we will fight, or may have to fight, by 2030.
“That requires a lot of change. Every day that goes by without the resources to start, that is a day lost when we already don’t have a lot of time.”
Sir Keir Starmer has refused to rule out tax hikes to fund defence spending.
The Prime Minister and Chancellor are reportedly arguing for a £15 billion package, far short of the £28 billion over the next four years which defence officials have called for.
The Government’s defence investment plan is due to be published ahead of the Nato summit in Turkey, which begins on July 7.
It was originally slated for publication last autumn but has been repeatedly delayed.
