The Treasury is “missing a trick” on the value of the military to the nation, says Defence Secretary Penny Mordaunt.
Urging the Chancellor to loosen the purse strings this year, Ms Mordaunt claimed the Exchequer’s calculations were based on “flawed methodology”.
The Defence Secretary, who was promoted last month, told the House magazine she hoped the Chancellor would return to investing in her department.
She said: “I think the Treasury has been missing a trick – it has not really understood the full value of defence to the nation.
“The methodology that it uses is flawed so, in advance of the spending review, I will be setting out why I think it should change its methodology towards its assessment of the return to the UK of investing in defence.”
Ms Mordaunt said she wanted to reset the Government’s relationship with industry and create a “compelling case” for “more opportunities for British companies”.
She added: “The research and development that’s going on in defence has tremendous potential for other sectors.
“We should not just be a drain on resource, we should be a contributor to resource, and if the Treasury see the opportunities they are not capitalising on at the moment, we will be able to do that and make a compelling argument why we are a very good investment.”
On that basis, the Defence Secretary has demanded the MoD be able to award shipbuilding contracts to UK firms after Brexit and has called on DexEU to make it a “red line” in negotiations with the EU.
“I want to be able to have the choice about reserving our ability to build ships and other capabilities,” she said.
“Currently it is argued that we don’t have the choice and I have expressed that view very strongly to DExEU and have been backed up with support from an array of experts in this field. That is one thing I have done very swiftly.
“We may not choose to do it in all circumstances, we’re going to have much more work in our yards in the coming years, but I think we should reserve the right to do that.”
Ms Mordaunt, a Royal Naval Reservist who has served as a sub-lieutenant, also revealed the Queen has promoted her to the rank of Commander with an honorary commission in the Royal Navy.
She said: “You’re still part of the fleet but you help the service with a much more strategic role.
“It feels quite sad in a way, but I think it’s the right thing to do at this moment and with this job.
“I look forward to serving the fleet in my new role and it’s great that I still have a connection with the uniform.”