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Confusion on defence spending plans
David Cameron's plans for Armed Forces spending after 2015 have been plunged into confusion as the Defence Secretary was unable to confirm an apparent commitment to above-inflation budget rises.
Senior sources have indicated that the Prime Minister would deliver real-terms rises in the Ministry of Defence (MoD) budget after 2015. Tensions have been growing in the Coalition as negotiations begin over how to save billions of pounds more in the 2015-16 spending review.
Philip Hammond, the Defence Secretary, who has already seen his budget slashed by 8% in real terms since 2010, is believed to be among ministers resisting further cuts.
However, during the Prime Minister's trip to North Africa it was signalled that he "does not resile" from comments he made in October 2010, when he appeared to accept that defence spending had to start rising again from 2015 onwards.
But Mr Hammond said that he had been given a commitment that the equipment side of his budget - accounting for roughly half of MoD spending - would rise in real terms, but that there would be a "robust discussion" about other elements.
"I have a firm commitment that the equipment plan, which is a very large part of the defence budget, will rise in real terms by 1% a year between 2015 and 2020, that's a commitment that has previously been made and repeated since the Chancellor delivered his Autumn Statement," he told BBC Radio 4's Today programme.
"But there is going to be a spending review for 2015/16 and I will go into that arguing the case for the resources that defence needs to deliver the plan that we have set out, Future Force 2020, and I am very confident that we will have a robust discussion about that."
Downing Street said Mr Cameron's previous statement had been referring to the 2016-17 financial year and beyond, and not 2015-16. The PM's spokesman said: "As his remarks at the time made clear, in the years beyond 2015 means starting in 2016. To suggest otherwise would be quite wrong."
Shadow defence secretary Jim Murphy said the NAO report "confirms what many feared - Philip Hammond has failed his own test of balancing the MoD books. This supposed 'mission accomplished' fact is more like a 'wishful thinking' claim."
Mr Murphy added: "The Government has not provided a full list of equipment that is accounted for. The financial baseline against which projections are made is unknown. This report covers less than half of defence expenditure. The Government's claims don't add up."