Rishi Sunak faces some familiar problems as he gears up for the Spring Budget on March 15. Not least of all, Jeremy Hunt’s decision to retain the corporation tax hike which is likely to put the prime minister on a collision course with Boris Johnson and Liz Truss. The manoeuvring predecessors are desperate as ever to exact political pain.
Of course, flattering factions and appeasing antagonists has been crucial to Sunak’s political operation since October. But the former chancellor takes fiscal stolidity very seriously — far more seriously than onshore wind and the online safety bill (the background to two notable previous U-turns). And fresh off a victory on the Northern Ireland Protocol and potentially another on “small boats”, the PM has political capital to spare for perhaps the first time in his premiership. Maybe, just maybe, he can stare down the tax-cutting cabal.
However, the political terrain arguably points to a more portentous showdown; a clash not with the “Bring Back Boris” brigade or unrepentant Trussites, but versus defence secretary and one-man-faction Ben Wallace.
“Wallace watch” is fast-becoming a fruitful pastime in SWI, with the long-surviving cabinet minister never far removed from the fiscal frontline. It is telling that consecutive prime ministers have surrendered the defence brief to the highly-respected secretary of state — and of course the current Downing Street occupant is no exception. Despite Wallace’s refusal to back Sunak twice-over in 2022, his personal fiefdom at MoD remains unassailed. It is an approach that has seen Wallace emerge as the longest-ever serving Conservative secretary of state for defence, resolutely withstanding the revolving door that has swept through ministries in recent months.
“Quite a low bar”, Wallace wisecracked when the achievement was raised by fellow Tory MP Mark Francois at the ConservativeHome’s defence and security conference on Monday. Outlasting Lord Peter Carrington, who served in Ted Heath’s cabinet for 3 years, 6 months and 19 days, is apparently little worth much to the man who served furthermore as security minister from 2016-2019.
Not content with mere longevity it seems, Wallace has instead aimed his sights at a different kind of legacy.
‘The Battle for Defence’
Wallace’s political prominence has risen in tandem with the modern incarnation of the “guns or butter” debate. This famous economic trade-off, referring to the relationship between a nation’s investment in defence and civilian goods, has taken on new meaning in light of Vladimir Putin’s illegal invasion of Ukraine. The war has sent global prices spiralling, with defence policy becoming evermore politically prescient in turn.
When it comes to “guns or butter”, Wallace imagines himself as lead patron of the “gun” faction — using his weight to demand an extra £11 billion for his department in the upcoming Spring budget according to one report. Wallace will of course be cognisant of the fact that MoD is especially exposed to inflationary pressure due to its large equipment projects.
But with “butter”-backer Jeremy Hunt at the helm, the “gun” position is under concerted siege. Notwithstanding the chancellor’s military upbringing, a new report by The Times suggests that the Treasury has thwarted Wallace’s advance with an offer of £5 billion. It’s considerable — but less than half of the defence secretary’s desired sum.
When it was announced that the defence secretary would be speaking to the ConservativeHome conference on Monday, therefore, Wallace watchers were braced for a new phase in his fiscal dogfight. Would Wallace now go scored earth on spending? Having threatened resignation on spending matters in the past, we were expecting nothing less than an explosive intervention.
It was not to be.
Rather, Wallace outlined that he was “pretty confident” that the armed forces will get the funding they need in the upcoming budget. The comment amounted, on the surface at least, to a rapid, ragged retreat.
However, the defence secretary quickly conditioned his support for the forthcoming budget with a more substantive declaration: “The real battle for defence will be the next Comprehensive Spending Review period [in 2024-25]”.
So far from an armistice in his war of words with the treasury, Wallace was instead preparing political background for future animosities. Although Wallace might lose the Spring budget battle he would, the subtext suggested, win the war.
The “battle for defence”, Wallace explained, was not a campaign limited to a Spring offensive headed by a noncommittal Treasury lieutenant — but part of a broader mission of “culture” change in Whitehall. Defence policy could no longer be defined by the mistaken terms of the world’s post-Cold War détente.
Wallace outlined the new reality: “The Treasury and other government departments will just have to get used to the fact that come the next Spending Review envelope, defence will have a greater share than it’s traditionally done”.
Curiously, the defence secretary’s reference to the 2024-25 spending review was a signal that he was not treating the 2024 election as a deadline for delivery. It is a stark comparison to other leading lights of Conservative governance, whose briefs have been defined by the deliberately short-termist “five priorities” announced by the prime minister in January. Culture change, Wallace calculates, cannot operate by such an arbitrary schedule.
Addressing the ConservativeHome audience, Wallace even issued what might be interpreted as a coded critique of Sunak’s “five priorities”:
[I have been trying] to change the culture of where defence should sit in our psyche, in our elections, where it should sit in our importance. … Because governments always say, of whatever colour, that ‘the first duty of government is to defend the nation’ and then promptly go on and leave it well off the priorities of any electoral campaigns we ever see.
Wallace hence counselled: “I think the biggest thing that the government could do … is give me a ten year budget. My Italian colleagues got a ten year budget. My German colleagues got a ten year budget. My French colleagues have ten year budget”.
As a senior government minister, one wonders who Wallace’s intended audience was here. But it surely expanded far beyond those stationed before him at the ConservativeHome conference.
Taking aim also at a “political lack of courage” on defence and “a lack of corporate responsibility”, Wallace’s approach naturally begs broader questions of his adherence to cabinet collective responsibility.
Winning the war
When the prime minister first promised to halve inflation, grow the economy, reduce debt, cut NHS waiting lists and pass laws to stop “small boats” in January, he claimed he was pronouncing the “people’s priorities”. But the short-term political calculation behind the pledge-making was hardly concealed. It was an overt acknowledgement that the government needs some policy success on which to rely in 2024.
As one of a few cabinet ministers to have emerged through the Conservative “permacrisis” with his reputation enhanced, Wallace simply does not conceive of policy-making on these terms.
Defence policy does not have time for a “permacrisis” or its debilitating legacy. Nor can it be encumbered by political point-scoring — certainly not when faced with the first land war in Europe since WW2. This point is crucial. For it suggests Wallace does not define success by a Conservative victory in 2024.
“I’m not sure I’ll be here in two years”, Wallace declared on Monday. Perhaps tellingly, the forbearance didn’t seem to fuss the defence secretary.
His priority now is to engrain a new “culture” in Whitehall, bolstering ideas sufficiently that a future secretary of state, of whatever political stripe, may be unable to ditch them. His ultimate victory will hence not be delivered through electoral triumph, but in the curation of meaningful institutional memory in the defence department. Any other outcome, defined by short term spending commitments, risks proving pyrrhic in the long term.
And when Wallace has successfully conquered Whitehall “defence orthodoxy” (think Treasury orthodoxy), NATO and the secretary-general position may just await.
