Treasury minister declines to confirm DIP gap

The Chief Secretary to the Treasury repeatedly declined to confirm there was ever a gap between what the Ministry of Defence wanted and what the Treasury was prepared to fund, in a joint session of the Treasury and Defence Committees that heard the Treasury committee chair tell her it was “not credible” to deny one existed.

Asked directly whether a figure widely trailed before the Defence Investment Plan’s publication was accurate, Lucy Rigby told MPs on 8 July: “I think the 28 billion pound figure that you referred to is not something that we recognise. And my understanding is that whilst I wasn’t in post at the time, that was never a formal ask that was made of the Treasury.”

Pressed on whether a higher figure than the eventual £15 billion had been sought at any point, she said the sum “was the figure that was alighted upon clearly by the Prime Minister, the Chancellor, and the Secretary of State for Defence, funding all of the capability which is detailed in this document.”

The committee chair rejected this, saying “We had a defence secretary resign, Chief Secretary, because he didn’t think there was enough money to cover the defence investment plan. So it is not credible to say there wasn’t a gap. There was a gap in what he believed, and others in the Ministry of Defence believed, was necessary to fund our defence capability,” he said, asking what the gap actually was given the coming change of Prime Minister.

Rigby replied that John Healey’s resignation letter was “obviously in the public domain, and he said what he said, but the dip that has been delivered is different, and it contains different capability.” Pushed to be precise about what had changed in roughly two weeks between Healey’s resignation and the plan’s publication, she cited a £500 million transformation fund to support MOD efficiencies, a further £400 million contribution to the Multilateral Defence Mechanism, and an additional £600 million directed to new autonomous capability.

The chair noted that the same period also produced reductions, including the retirement of the Type 83 destroyer concept and the early retirement of the Wildcat helicopter, and asked Minister for Defence Readiness and Industry Luke Pollard to account for the coincidence of timing.

Pollard described the changes as falling into two categories, one on capability, where more money moved into readiness, autonomy, drones and low-cost effectors rather than complex munitions, and one on the financial settlement itself, covering both the total sum and the balance between resource and capital spending. Asked directly how long elapsed between Healey’s resignation and the plan being signed off, Pollard said “roughly two weeks, ish.”