By April 22, 2010 Read More →

Britain’s Looming Defense Budget Squeeze

Although neither candidate has spelled out exactly where the budget axe will fall, military spending will almost certainly take a hit in coming years, regardless of who leads the next government. In fact, all three candidates say the status quo on military spending is unsustainable, and all are calling for a post-election strategic defense review (SDR), one that will sketch out what sort of armed forces Britain can afford in the medium to long-term.

Britain’s Looming Defense Budget Squeeze

Soeren Kern | American Enterprise Institute | April 22, 2010

Although neither candidate has spelled out exactly where the budget axe will fall, military spending will almost certainly take a hit in coming years, regardless of who leads the next government. In fact, all three candidates say the status quo on military spending is unsustainable, and all are calling for a post-election strategic defense review (SDR), one that will sketch out what sort of armed forces Britain can afford in the medium to long-term.

With the British general election set for May 6, the campaign is now racing in full gear. In recent days, the three front runners – Labour’s Gordon Brown, Conservative David Cameron and Liberal Nick Clegg – have all published their policy manifestos, and for the first time in British history, have participated in a live television debate.

But opinion polls show there still is no outright winner. Most polls have the Conservatives in a small but narrowing lead over Labour, and some surveys are showing a post-debate surge for the Liberals. If current polls are to be believed, there is a good chance that no one party will win a governing majority, an outcome that would pave the way for a coalition government.

In any case, the troubled British economy is the dominant issue in this campaign, and there is very little substantive difference among the three candidates over how to fix it. All three agree that drastic cuts in public spending are needed to draw down a colossal national debt and a bulging budget deficit. The only real difference of opinion revolves around timing: Cameron wants to reduce spending now, but Brown and Clegg say immediate cuts would endanger Britain’s fragile economic recovery.

Although neither candidate has spelled out exactly where the budget axe will fall, military spending will almost certainly take a hit in coming years, regardless of who leads the next government. In fact, all three candidates say the status quo on military spending is unsustainable, and all are calling for a post-election strategic defense review (SDR), one that will sketch out what sort of armed forces Britain can afford in the medium to long-term.

The Royal United Services Institute (RUSI), a British military think tank, has produced one of the most comprehensive estimates of what the military budget might be like during the period covered by the SDR. In a report titled “Preparing for the Lean Years,” RUSI says defense spending in Britain could be slashed by up to 15 percent in real terms during 2010-2016 as the next government enacts austerity measures to tackle massive public debt. RUSI says cuts on this scale could produce significant reductions not only in manpower but also in the acquisition of new weapons systems; they could also affect ongoing operations abroad, such as in Afghanistan.

The House of Commons Public Accounts Committee says the British Ministry of Defense faces a funding shortfall that runs from £36 billion to as high as £80 billion over the coming decade. The report warns that the defense budget is “fundamentally unaffordable.” Matters have become so bad, it says, that the Defense Ministry “will have to take difficult decisions, such as to cancel whole equipment programmes.”

The Labour Party has been questioning whether Britain can afford to retain its full military capabilities. A controversial government green paper titled “Adaptability and Partnership: Issues for the Strategic Defence Review,” says Britain cannot afford to pursue all its current defense activities while supporting operations in Afghanistan and elsewhere and investing in new systems. In a major shift from previous policy, the paper says Britain could offset retrenchment by increasing its dependence on military alliances, especially with France and the European Union.

The Institute for Public Policy Research, a think tank with strong ties to the Labour Party, says the government could save billions by restructuring the British military to focus on specialist capabilities as part of a greater commitment to European defense integration. The IPPR also says Britain should reconsider plans to replace the existing Trident nuclear deterrent, which goes out of service in the 2020s; and it recommends reviewing whether major projects like the Future Aircraft Carrier, the Joint Strike Fighter and the Astute nuclear attack submarine are needed.

The Conservative Party says Britain must retain the capability to act unilaterally and not just as part of an alliance. In a speech outlining Conservative Party plans for the SDR, Liam Fox, the shadow defense secretary, said: “We have unique national interests and have to maintain the capability to act unilaterally if required.”

But Fox has avoided making commitments on defense spending levels, and says the next government will inherit a grim economic situation from which “defense cannot be immune.” Fox also says the SDR will be carried out “ruthlessly and without sentiment. Tough decisions will be made and there will be winners and losers at the end of the process. … Make no mistake; we need a step change not tinkering.”

George Osborne, the Tory Shadow Chancellor of the Exchequer, has said that three of Britain’s biggest defense projects with a combined value of nearly £30 billion could face the axe if the Conservatives win the election. He cited the £20 billion Eurofighter-Typhoon project, the £4 billion project to build two aircraft carriers and the £3 billion order for 25 A400 transport aircraft as areas ripe for cuts.

For his part, Clegg says the Trident nuclear deterrent should be scrapped, saying it is too expensive and no longer meets Britain’s defense needs. Replacing the Trident would cost an estimated £20 billion. Clegg also rejects the idea that Britain’s diplomatic status as a world power on the UN Security Council would be undermined if it was no longer a nuclear-weapon state. “That is nostalgic, sepia-tinted phooey. The Security Council is a complete anachronism. It does not reflect at all the changed world we live in.”

Meanwhile, with the election less than a month away, Brown is pledging billions in extra defense spending in what the Tories say is a last-minute effort fend off accusations that he has failed to properly equip British troops in Iraq and Afghanistan.

In recent weeks, Brown has promised to proceed with the construction of two 65,000-tonne aircraft carriers at a cost of £5 billion, and to build two more Astute-class nuclear submarines at a cost of £2 billion. He has also announced contracts for armoured fighting vehicles and other equipment totalling more than £2.5 billion.

The contract awards have been sharply criticized by the Conservatives and Fox has compared them to a “bankrupt shopaholic on one last spending binge before jail.” He has pledged to re-examine many of the deals if the Tories win the election.

Soeren Kern is Senior Fellow for Transatlantic Relations at the Madrid-based Grupo de Estudios Estratégicos / Strategic Studies Group. Follow him on Facebook. Follow him on Twitter.

Originally published by the Center for Defense Studies at the American Enterprise Institute.

Print Friendly

Comments are closed.