Britain’s defence spending endangers security
Sunak’s talk of raising our Armed Forces outlay from 2pc of GDP to 2.5pc will strike no fear into Putin
‘The Armed Forces have traditionally contributed a lot to the life education of large numbers of people’
Rishi Sunak has an “aspiration” to increase defence spending from 2pc of GDP to 2.5pc. But I doubt whether President Vladimir Putin places much store by aspirations.
The next government, whether Conservative or Labour, will have to conduct a defence review pretty soon and, in contrast to recent efforts, this is going to have to involve major increases in our defence spending.
History helps to put matters in perspective. Spending 2pc to 2.5pc of GDP on defence is not unprecedented. Indeed, that was the level of our defence spending throughout the later part of the 19th century. Mind you, in those days we were the global hegemon, there was less expensive, hi-tech equipment to spend money on and, of course, there was no RAF.
Defence spending rose in the run-up to the First World War and exceeded 50pc of GDP in 1916 and 1917. After the war, it fell back to 2.5pc of GDP but in 1936 defence spending rose to 3.5pc, followed by 4.6pc, 6.5pc and 9.2pc in 1939, again rising to more than 50pc during the Second World War, before falling back sharply afterwards.
Strikingly, our defence spending was running at 4pc of GDP or over throughout the 1970s and most of the 1980s, falling to 3.8pc only in 1987. It was 4.5pc of GDP in 1982, the year of the Falklands War. And, despite cashing in the so-called peace dividend, we were still spending 3pc of GDP on defence in the early 1990s.
Bearing in mind this history and the nature of the threats facing us, we should probably now be aiming to spend something like 4pc of GDP, implying a doubling of expenditure. That implies finding something like an extra £50bn a year. Where is the money to come from?
The comfortable answer is to believe that economic growth will throw off extra tax revenues that can be spent on defence. Let’s hope. But the benefits of such growth as we are able to achieve are already spoken for many times over.
There are only three ways of funding such an increase in defence spending – higher borrowing, higher taxes or reduced government spending. The huge increases in defence expenditure that we have sustained during the Napoleonic, First and Second World Wars were financed by enormous amounts of government borrowing. Given the current debt numbers, higher borrowing to fund increased defence spending is not an attractive option. Meanwhile, with taxes running at a 70-year high, surely it wouldn’t be sensible to be thinking about such a huge increase in taxes.
This leaves us with the uncomfortable conclusion that any large increase in defence spending will have to be funded by making savings on other parts of government expenditure. In principle, savings could come from any or all types of government spending. But there is one area which stands out. Total spending on what is euphemistically called “social protection” has risen from £164bn (12.2pc of GDP) in 2004/5 to £319bn (12.6pc of GDP) in 2022/3.
Within this total, spending on “family benefits, income support, Universal Credit and tax credits” has risen from £11.7bn to £56bn, while sickness and disability has risen from £31bn to £65bn. So you could say that what we need is a switch of spending from welfare to warfare.
Fortunately, it would not be sensible to increase defence spending very rapidly. That often leads to waste.
Instead, spending has to be increased speedily but gradually in the context of a multi-year strategy, thereby allowing procurement to be planned and recruitment to be boosted.
As well as strengthening our security, increased defence spending would bring some economic benefits. The Armed Forces have traditionally contributed a lot to the life education of large numbers of people, providing skills, discipline, community and a sense of self-worth.
On a broader canvas, a strengthened defence posture would greatly improve our relations with a number of friends and allies around the world and that may well bring economic benefit too in the form of trade agreements. This applies not only to the United States, which is clearly getting anxious about the weakened defence capability of its closest ally, but also to countries in the Pacific and to members of the European Union.
Remarkably, pending their admission to Nato, we recently gave a security guarantee to EU members Finland and Sweden.
Admittedly, effective defence is not just about how much money you spend. As with everything else, money can be spent well or badly. And there is plenty of evidence that our defence procurement has been badly managed. We should be getting much better value for money.
Yet careful husbandry is one thing and extreme parsimony is another. It can bring false savings. What is the point of having two expensive aircraft carriers if we cannot provide the requisite planes, supply ships and escorts, as well as the people to fly and sail them? Recent recruitment difficulties are partly due to inadequate pay but they also reflect the perception that with defence spending being squeezed, the Armed Forces do not offer attractive career prospects. That needs to change.
It is pathetic for us to pretend that we can project power while spending so little. For some time, Britain has been trying to do defence on the cheap. We are currently deploying forces in the Middle East and we have had a presence in the Pacific and Indian oceans.
This is not inevitable. We could decide to be like most other European countries and hardly pretend to be able to defend ourselves, never mind playing a role on the global stage.
But if we are serious about being able to defend ourselves and being a key contributor to the defence of Europe, while continuing with our global role, then we surely have to devote sufficient resources to the task. This must be a priority for the prime minister. Defence is too important to be left to the bean counters.