Monday, 18 October 2010

Military spending protected in Tory cuts

By Michael Burke

The BBC has reported that the Defence budget will only be cut by 8% in the forthcoming Comprehensive Spending Review, compared to cuts of not less than 25% for other departments.

This continues the privileged position of British military spending compared to other departments. There were complaints from military leaders that the Strategic Defence & Security Review (SDSR) was in danger of simply becoming a budgetary exercise, which is exactly what virtually every other department has suffered. For example there was no Strategic Housing Review to gauge housing needs over the medium-term, nor transport; the Browne review of higher education funding was solely an exercise in shifting the source of funding from the state to individuals; at no point is there an analysis of the needed level of investment or its consequences.

The immediate post election ‘emergency Budget’ where nearly all areas of spending were cut can be contrasted with the postponement of the decision on renewing the Trident nuclear weapons’ system. It was not included in the SDSR at all even though the costs run into tens of billions of pounds.

In the government, the political debate on this budget was led by extremely pro-US policy, represented by ultra-loyalists to the US such as by Liam Fox - a favoured son of the neo-conservative US Heritage Foundation. The intervention of US Secretary of State Hilary Clinton may have determined the final outcome.

Military Spending in UK GDP

Britain has the highest level of military spending of any G7 country, as a proportion of GDP, after the US. It also had the highest proportion of spending of any EU member state with the exception of Greece - where chronic excessive military spending is key source of the economic and budgetary crisis.

The UK ‘defence’ budget is officially said to be £37bn, but this is an underestimate as it excludes many other outlays, including military research, increased health and other spending on returning military personnel and the fact that military operations, such as Afghanistan are often funded from ‘contingency reserves’. In calculating the cost of the Iraq war, for example, Joseph Stiglitz and Linda Bilmes talk about the US Defense Department ‘keeping two sets of books’, so that the public does not see the true cost of the war.But even that secrecy and obfuscation is outdone by the British authorities, ‘The British system is particularly opaque: funds from the special reserve are “drawn down” by the Ministry of Defence when required, without specific approval by Parliament. As a result, British citizens have little clarity about how much is actually being spent’.

Yet even at the official lower estimate the military is vast over-spending, equivalent to 2.5% of GDP. No-one suggests that a country such as Germany is less secure than Britain and its military spending is approximately half that level at 1.3% of GDP.

In context, a reduction in the military budget to Germany’s level would save half of the UK total and produce a saving of £18bn- equivalent to the VAT hike and all the welfare benefit cuts of the March 2010 Budget which will hit next year.

But naturally protecting the living standards of the population is not the policy of the Tory-led Coalition. Instead, there are simultaneous reports, in reality government briefings, that there is £38bn ‘shortfall’ in the Defence capital budget for military hardware. Leaving aside the nonsense about ‘writing a cheque for which there no funds’ - as all government commitments are made from future cashflows , the political purpose of this is a softening up process, where the government will be able magically to find the ‘shortfall’ through additional funds. In this way, although numerically the armed forces personnel may well decline fractionally total military spending will probably not fall at all, but will actually increase.

International Development

The Tory-led coalition has repeatedly stressed its commitment to international development by ‘ring-fencing’ the budget from Departmental cuts. However, less trumpeted is the significant reorientation of policy, so that the ‘development ’priorities are now Afghanistan, Pakistan and the Horn of Africa – which all ‘coincidentally’ happen to be the priorities of US and UK military action. Real and necessary aid is being reduced elsewhere. For example, to no British Minister attending the Haiti donors’ conference, as, not having made any substantive donations, they would not have been given speaking rights . Instead, the development budget is to be increasingly used to back up military priorities.

In short, in Britain the poorest will suffer financially in order to fund the priority given to military spending. Internationally, the suffering will be much greater as military adventurism continues to dominate US and UK policy. This is a strange 21st century reverse alchemy- turning coppers given to poor into lead, as Britain pursues a global role of aide-de-camp of US imperialism. It should be opposed by everyone with any sympathy for their fellow human beings.

3 comments:

Anonymous said...

Interesting article but would be better if you quoted your sources for some of the stats.

For instance, according to what I could find (https://www.cia.gov/library/publications/the-world-factbook/rankorder/2034rank.html) the UK ranks behind both France and the USA (both G7 countries) in terms of military spending as a percentage of GDP. But I could well believe you've got some more recent figures than those?

Quoting where we lie in such an arbitrary grouping of countries as the G7 is somewhat mischievous too.

But I'd certainly agree with the gist of your article.

Anonymous said...

Stockholm International Peace Research Institute quotes the 2008 figures for the UK and France at 2.5% and 2.3% of GDP respectively. (http://milexdata.sipri.org/)

The G7 seems a fairly logical comparison group to me. These are similar industrialised countries with large economies. There's no sense in comparing the UK's spending to that of Chad or Iceland.

Michael Burke said...

Anon,

no mischief intended.

The link below is to the OECD's Government at a Glance 2009, and you can find all the data under 'General Government Expenditure by Function'. It should have been included in the piece.

The OECD data is superior to the CIA's as it is for a common year and makes no adjustments for currency exchange rates, which distorts and is unnecessary.

http://www.oecd.org/document/33/0,3343,en_2649_33735_43714657_1_1_1_1,00.html

It shows British military spending at 2.5% of GDP, French at 1.8% and US at 4.3%- as the article said, the highest in the G7 after the US.

Britain has peer groups, one of which is the G7 and another is EU member states.