Plans by the Conservatives to cut defence spending by 2.2% or £500m in 1997-98 were this week attacked by Labour as `yet another broken promise’.
The cut was revealed in the Ministry of Defence’s report on spending plans for 1997-98 to 1999-2000. It said in the current financial year there will be a 2.2% cut in real terms on last year’s spending. This follows cuts of 0.9% in 1996-97, 7% in 1995-96 and 2.6% in 1994-95.
The Conservative Central Office said the latest moves represented `the difference between planned spending and the actual outcome. It includes the fact that inflation was lower than forecast and therefore you reap the benefit’.
But on Monday the Office of National Statistics said inflation stood at 2.7%, well above last November’s budget prediction of 2.5% for the second quarter of 1997.
The Conservatives also said a comparison of spending in the current and the next financial year did not take account of the cost of operations such as the army commitment in Bosnia which is `likely’ to increase estimated spending. But the Bosnia costs would not alter plans for reduced defence procurement spending.
Defence review, page 12