While it is clearly good to see UK Defence Secretary, Ben Wallace in the Financial Times interview with Lucy Fisher warning last week of the increased level of threat of wider global conflict by the end of the decade and calling for “a firm timetable for increasing UK military spending to 2.5 per cent of gross domestic product” we can be pretty sure that the only way the latter will occur is probably if UK GDP declines.
Words of warning may well be compelling and much needed but it is a sad fact that the probability is that however stern, however loud, however necessary and however meaningful, they will fall on deaf ears at the Treasury and Cabinet Office.
After the US, the UK has played the single most important role supporting Ukraine in its hour of need. Now, the US is stepping further up to the plate and so too are Germany, Italy, France and Belgium. It is not a competition and all credit to the UK Government for its fast response and actions to help Ukraine But it is a sad fact that after providing an unquantified number of probably timed expired Storm Shadow missiles, the UK has little else that it can give. The notion that we might also have been able to provide fast jet capability left much to be desired for the simple reason that we haven’t got enough to defend the UK and international commitments and that when it comes to equipment capability and overall available capacity, we are a nation that when it comes to defence is already drained of available resource.
In the FT Interview last week Mr. Wallace referred to the “abnormal period [of peace] post-cold war” warning that in his view “conflict is coming with a range of adversaries around the world” adding that “We need to all be prepared for it.”
The warning by the UK Secretary of State for Defence, a man who to his great credit, has been central in rallying wider European support for Ukraine, was accompanied by a plea to chancellor Jeremy Hunt to put a timeframe on the commitment to lift the defence budget from 2.1 per cent to 2.5 per cent of GDP of 5 years, In his first budget Following discussions and much pressure. ahead of the Budget Mr Hunt eventually and no doubt, reluctantly responded by suggesting that GDP in relation to defence will have risen to 2.25% of GDP by 2025. Caution is however advised and I would remind that with its poor record of forecasting, we should perhaps be wary of Office of Budget Responsibility (OPR) forecasting and presumptions on GDP.
In fact, in that March Budget Mr. Hunt promised to provide the MOD with £11bn spread over the next five years and reiterated the government’s “aspiration” to increase defence spending to 2.5 per cent of GDP in the longer term although hardly surprisingly, he did not specify a timeframe. Mr. Wallace responded by welcoming the extra funding but added in the Financial Times article: “There’s one plank left to go, which is a date.”
The MOD is and will no doubt, continue to struggle and some of that extra £11bn will already have been wiped away by the fall in the value of sterling against the dollar. Equally important is defence inflation, a long-standing problem but one that is often caused by our changing course midstream, cutting numbers of planned ships, planes and army vehicles and so on. Recent examples include E7 Wedgetail – cut from 5 airframes to 3 but with internal capability ordered remaining based on 5 airframes. Ajax is another recent issue and where costs along with inflation massively added to the cost.
That the UK’s defence spending has fallen fairly steadily from a figure of 10% in 1950 is often cited as being the primary issues of concern but the reality is how attitudes to defence spending have changed. For instance, when Labour Prime Minister Clement Atlee and his then Chancellor of the Exchequer, Hugh Gaitskell announced in 1951 that the increased costs of the UK’s contribution to global defence would require a rise in production and fall in consumption and that as a result, living standards would fall, no-one batted an eyelid albeit that Atlee was thrown out of Government later that year. Imagine that occurring today!
Even the great Manny Shinwell who was Defence Minister at the time in 1951 said that a new 3 year programme of defence production, research and development would cost £2.2m compared to the £630m spent over the past three years and that this would require heavy economies in living standards and that eyes would be cast on the new ‘Welfare State’ for potential savings, there wasn’t a massive storm of protest. Imagine that being said today!
However, for the record no such cuts to the Welfare State budget (the new NHS and pensions etc) were actually made. Ironically it was Churchill’s second administration which began later that year that unwittingly or otherwise, began to realise that the cost of carrying put Labour defence programmes threatened to throw the national economy out of balance although it was left to Duncan Sandys who under Harold Macmillan began the long process of slashing defence spending that has, apart from a brief period under Margaret Thatcher, continued to this day.
Suffice to say that back in the real world of today Mr. Wallace, as Secretary of State for Defence, is very much on top of his brief and gets it. But sad to say that his Cabinet colleagues do not and neither will they. Defence was an anathema to David Cameron, Theresa May and Boris Johnson and while Rishi Sunak is a very good cheerleader, talking the talking, preaching what he might wish to believe that the Government is doing the reality remains, – not nearly enough. Neither would a Labour Government be any better despite promises to the contrary.
The FT article quoted RUSI analysis that suggested in order to increase the core defence budget to 2.5 per cent of GDP by the end of this decade would require additional spending of £14bn in 2029-30, and an additional £42bn over the five years of the next parliament. Of course, unless there is a war that directly threatens the UK, raising spending on such a scale is just not going to happen.
As usual, as a former Army man Mr Wallace has unfortunately stuck to his mantra that of all three of our armed force elements it is the army was most in need of urgent investment, declaring it was “15 years behind and needs to modernise”. Modernise yes, but equipment with level of capability that will increase capacity, our now extremely limited air power needs to be better addressed as a priority.
In her Financial Times article Lucy Fisher had, and as I also had myself last Monday, reminded that Wallace is preparing to unveil a refresh of the 2021 defence command paper and which set out plans to modernise the armed forces. That can be expected to be announced in about four weeks.
In the article Mr. Wallace is quoted as saying “The government needs to indicate its priorities. Unless you say to the Treasury at the next spending round defence will get a greater share [of money], the Treasury won’t prepare for that” adding that “he was trying to change a Whitehall culture in which the defence budget has been seen as the “go-to bucket of cash for other things”, or a “quarry” to be mined for money for other government priorities. But, as Lucy Fisher pointed out, “he appeared to reject calls by critics to reverse his decision to cut 9,500 troops from the army, reducing it to 72,500 — its smallest size since the Napoleonic era — arguing that new technology will allow fewer personnel to deliver greater effect”. To that I say tell it to the enemy!
CHW (London 22nd May 2023)
Howard Wheeldon FRAeS
Wheeldon Strategic Advisory Ltd,
M: +44 7710 779785
Skype: chwheeldon
@AirSeaRescue