Labour’s place in a more threatening world: Three takeaways from John Healey’s Policy Exchange speech.

Like many of his Shadow Cabinet colleagues John Healy, the Shadow Defence Secretary has been setting out some low or zero-cost reforms to improve the effectiveness of the Ministry of Defence. In a speech in February, he called for:

  1. the MoD to reset its relationships with Whitehall, especially the FCDO and Treasury,
  2. a new Military Strategic Head Quarters (MSHQ)to engage in strategic direction and decisions,
  3. the new MSHQ to be more capable of making decisions about the balance of investment between capital (i.e. equipment) and resource (i.e. people) budgets.

A Reset? The MoD and Whitehall

He’s already set out policies such as the NATO test, which prioritises the UK’s commitments to defending Europe, as well as requiring defence programmes to be scrutinised by the planned Office for Value for Money. MoD officials are drafting proposals to implement these plans and will now focus on what he set out in his latest speech.

Evidence of the need for a reset of Whitehall relations on defence and security has been building for some years. The 2016 Chilcott report, the 2021 report of the Joint Committee on National Security Strategy and the 2024 Institute for Government report all identified problems of how Whitehall Departments work (or more accurately don’t work) together. Whatever solutions are adopted they will require strong and clear direction from the Prime Minister.

No More Sticking-Plaster Politics

Also, in his speech, Healey said that the MoD is effective at managing current operations, but he wants the new MSHQ to engage in longer-term strategic planning and decision-making. This is in line with ending what Labour has described as sticking-plaster politics.

One example of this longer term approach is the commitment from the Shadow Chancellor, Rachel Reeves MP, to give “key R&D institutions” 10-year budgets, replacing the one to three year financial cycles they currently have. This could mean much more effective investments by the MoD’s own R&D organisation, the Defence Science and Technology Laboratory, as well as associated bodies such as the Overseas Development Institute. Another key priority is UK support for a proposed multi-year funding package to support Ukraine. This could have been agreed within months of the February 2022 second invasion of Ukraine with the right leadership from the UK Government, but that was never going to happen with Rishi Sunak’s sticking plaster approach.

Healey’s proposal to empower MoD planners with greater flexibility to shift funds between capital and resource budgets will be contested. Like many Spending Departments the MoD has a mixed record on budgetary management and Treasury officials will be rightly cautious of giving away too much control. The introduction of new technology (funded by capital spending) has clearly improved military effectiveness, with the latest example being the ubiquitous spread of drones. There is a longstanding view that only capital spending delivers productivity improvements but is that really valid?  Predictions about the future benefits of new technology can sometimes be too ambitious, as the recent claims about AI-supported actions in Gaza may eventually demonstrate.

In his influential report on general skills policy Lord Blunkett argued that spending on skills training can provide: “as much a return on carefully targeted investment, as any capital infrastructure programme, and should be treated as such.”

Estimating the return that investment in people can deliver is a challenging task. A study commissioned by the Army (and therefore viewed with scepticism by some) said that the annual value of Army training to UK plc was at least £550m. However, questions remain to be answered. Does this study include the various costs to the state that military veterans can generate, which may outweigh the benefits?

Financial and other support for Ukraine will continue to be a key priority for Labour. Shadow Ministers have already said that they want the estimated £26bn of Russian State Bank assets frozen in the UK to be used to support Ukrainian reconstruction. If Kyiv agrees at least some of these funds could be used for more immediate help. New legislation will be needed and will be opposed by those who claim this would set a dangerous precedent. However Putin has already requisitioned many Western assets, such as the $24bn that BP had invested in Russia so a precedent has already been established. Retaliation against the UK is also limited as it is unlikely that the Treasury have allowed any UK taxpayers money to be under the control of Russian institutions.  Of course, other governments with which the UK has strained relations might withdraw their national deposits which could in turn weaken certain parts of the UK financial sector. Various estimates of the costs and benefits of this policy are probably already circulating within Whitehall and Westminster.

Balancing Labour’s Priorities

These are just some of the very complex defence and security issues that a newly elected Government might have to tackle. There are other urgent domestic priorities and various crises which will distract decision-makers. Nevertheless, threats to UK national security are now higher than at any point since the end of the Cold War.

Those in the Kremlin and elsewhere trying to undermine UK security want to see as much division as possible, especially on national security issues. Therefore, on top of all the other challenges the next Defence Secretary will have to try and unify not just other Cabinet Ministers but also political opponents in Parliament, the media and across civil society. It won’t be easy but as the late James Maxton MP famously said “if you cannot ride two horses you have no right (to be) in the circus.”

 

If you enjoyed this piece, see Labour and the Long Fight: How should the next Labour government support Ukraine?