JEREMY Hunt and Ben Wallace have cut an eleventh hour deal to avoid £3 billion of cuts to the Armed Forces, HOAR can reveal.
The Chancellor will suspend Whitehall spending rules to allow the Ministry of Defence to borrow cash earmarked for future projects to meet inflation fuelled shortfalls in current spending.
Ben Wallace and Jeremy Hunt cut an eleventh hour deal to avoid £3 billion of cuts to the Armed Forces
The Chancellor will suspend Whitehall spending rules to allow the MoD to borrow cash
Mr Hunt is insisting all departments have to suck up the cost of inflation through their existing budgets ahead of Thursday’s Autumn Statement.
But the Defence Secretary warned there is a £3 billion shortfall in his vital spending plans due to soaring prices at a time of heightened national threat.
The Defence budget was boosted by £24 billion at last year’s spending review – set at £47.9 billion for 2022, growing to £48 billion in 2023 and £48.6 billion in 2024.
But MoD sources say soaring prices have wiped £3 billion from those spending plans – meaning cuts were needed.
Now the MoD will be permitted to divert “ring fenced cash” to meet the shortfall.
Money secured for future projects will be able to be brought forward for current spending ahead of a larger Budget in the Spring where departmental spending will be set out for the coming years.
Last night Rishi Sunak hinted the MoD could suck up the squeeze, telling reporters in Bali: “We’re the second largest defence spender in NATO.
“So no one can say that we do not have a very strong position on defence.”