George Osborne has been touring the TV and radio studios this morning talking about the deals he has managed to strike with some of the smaller government departments for how they are going to cut their budgets in 2015/16. Talking about the settlements made with departments including Justice, Energy and Communities, the chancellor told the BBC:
We are now about 20 per cent of the way there with a month to go. I don’t think any chancellor in history has made this much progress with a month to go.
Osborne still has a huge amount to achieve in the next month, particularly in the face of intransigence from big departments such as the MoD and the Home Office. But in the middle of the spending round process, another decision on a massive item of government spending will also come a step closer.
Next month will see the publication of the very long-awaited report into the alternatives to replacing the UK’s Trident nuclear weapons system. This report was commissioned soon after the coalition came to power, with the two parties failing to agree a joint position on the British deterrent.
I have spoken to several people involved in the review process and several facts have become clear about what the final report will say. This is what we revealed in this morning’s FT:
1) There is no cheaper alternative to replacing Trident. The upfront costs of any airborne, land-based or even utility sub-based system are simply too high.
2) The only way to save money on Trident is to scale it back. You can do that mainly by reducing the number of boats from four to three, or even to two.
3) Reducing the number of boats to three would save very little money. Reducing it to two could save close to £1bn in annual crew and maintenance costs, but would mean abandoning round-the-clock patrols.
We also know that the Lib Dems are willing to back abandoning round-the-clock patrols as a way to save that money, even though it will trigger a big fight in the cabinet with Tories who insist Trident must be replaced in its full form. Already the report is causing some consternation within the coalition, as David Cameron insists that he sees and vets it before final publication. The prime minister is concerned the Lib Dems will present it in such a way to make it look like the paper backs their position.
This could just be dismissed as technical Westminster/Whitehall manoeuvrings, but the findings of the report could decide government policy after 2015, depending on what government is elected.
As we revealed earlier this year, Labour has U-turned on its previous stance of insisting on a like-for-like replacement of Trident, and signalled its willingness to back a cheaper option if the government review shows it to be workable.
The verdict that money could be saved by scaling back Trident means that both Labour and the Lib Dems will go into the next election backing such a move. This not only makes a Lib-Lab pact more likely but also means that any Labour government, whether majority or coalition would get rid* of Britain’s ability to patrol the seas with nuclear missiles at all times.
* A Labour source has pointed out that they are not decided at all about getting rid of continuous deterrence. As I have previously reported, there is an internal debate going on in the party on this point, but I am happy to clarify that many people within Labour believe that scaling back Trident (for instance to three subs, rather than two) would save money while also continuing round-the-clock patrols. We await Labour’s final policy response, which should come out some time after the Cabinet Office report.
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