Defence spending: What's the deal?

Take one raging Whitehall battle. Expose some of those discussions to public view. Place the prime minister on a plane with a gaggle full of journalists and ask his officials to comment. Let the questions simmer unanswered for several hours. Result? A glorious, copper-bottomed muddle that would be funny if it were not so serious.

Let me try to take you through just what the government may, or may not, be planning for the nation's defence budget.

The government is currently conducting what is called a comprehensive spending review for the financial year 2015-2016. In layman's terms, that means fixing how much government departments can spend in the first year after the general election.

The Treasury hopes to reach a deal on this before the summer holidays. It is a tense battle because the competition for money is not just between departments but also between the coalition parties.

Some departments are sitting pretty because they know they will be protected and receive above inflation increases, departments such as health and international development. The schools budget will also be protected.

But that means that the big spending cuts the Treasury has always promised will have to fall on other departments such as home, justice, business and defence.

Now, Cabinet ministers by and large fight these battles in private. But occasionally they go public, such as a few weeks ago when Theresa May, the Home Secretary, Vince Cable, the Business Secretary, and Philip Hammond, the Defence Secretary, raised their concerns around the Cabinet table and these were subsequently reported in the press.

On other occasions an enterprising journalist - step forward the indefatigable James Kirkup, my counterpart at the Daily Telegraph - remembers (or is reminded, perhaps?) a comment the prime minister made in the past in which he appeared to commit himself to protect a particular budget.

Take for example David Cameron's words to the House of Commons on the 19th October 2010: "The precise budgets beyond 2015 will be agreed in future spending reviews. My own strong view is that this structure will require year-on-year real-terms growth in the defence budget in the years beyond 2015."

The question is therefore obvious. Mr Cameron made that remark when he was expecting the economy to grow. With much less money coming in today, does the prime minister still stand by his view that he expects year-on-year real-terms growth in the defence budget beyond 2015?

The Daily Telegraph asked this question on the Prime Minister's plane over Algeria and reported that a senior government source close to Mr Cameron said: "The prime minister does not resile from anything he has said about defence."

So, that appears clear. The prime minister still thinks that the defence budget should rise above inflation after 2015. You can have a lively discussion about whether this is a pledge or an aspiration but that is Mr Cameron's view and he is, of course, the prime minister. The spending review discussions are only just beginning, there is a long way to go, nothing has been signed or sealed, but we have a firm, public indication that the prime minister does not want to see further deep cuts in the defence budget.

Certainly, one MOD source told me: "I don't think that anyone here is going to be unhappy that senior figures in Downing Street are supporting the idea of extra spending."

So far, so clear. Or not, as it happens.

Once this story appeared on the front page of the Daily Telegraph and was picked up by other media outlets, the line changed. The prime minister's official spokesman said it was quite wrong to suggest that Mr Cameron had decided to make no further cuts in defence spending in the year 2015-16.

He claimed that the prime minister's promise - as quoted above - had always referred to the years beyond 2015 - meaning the financial year 2016/2017 onwards. In other words, he was not referring to the current spending review discussions which only relate to 2015/2016, the first year in the new parliament. We "are not going to pre-empt the decisions which will be announced in the first half of this year", he said.

It is not clear on what evidence the spokesman is basing his assertion that Mr Cameron's use of the phrase "beyond 2015" was referring only to the financial year 2016 onwards.

So the bottom line, as far as we can assess it now, is that the prime minister wants defence spending to rise above inflation from 2016 but it is still possible that defence spending could be cut in the financial year 2015-2016.