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Money: the defence budget
THE money allocated to defence is a critical element in a country’s ability to defend itself and field effective military forces. As with all policy areas, like health, education or social care, adequate resources are a prerequisite for satisfactory performance. In this case, however, headline figures for defence expenditure are also notoriously imprecise measures of military capability. Spending public money on defence is no guarantee that a country can deploy first-class armed forces. And since those armed forces are seldom used for genuine ‘war-fighting’ it is impossible to measure their ultimate effectiveness except in the direst of circumstances. Unlike health or education sectors, which must perform almost to their full capacity every day, defence forces, at least in peacetime, may be very busy but seldom perform to their ultimate capacity. They offer the country something more akin to an insurance policy where it is difficult to assess the costs of the policy against the benefits and reassurance it provides.
So much depends on how defence money is spent; on the combat teeth or the supporting tail of the forces, on the civilian infrastructure to support the military establishment; on personnel or equipment; on senior officers as opposed to those in the ranks; on future investment or immediate needs, and so on. Many countries get very little real fighting capacity for large defence outlays, because it is so badly spent; others manage to spend moderate amounts very efficiently to achieve their national purposes.
Moreover, headline figures for defence expenditure always carry great political symbolism. Comparisons between expenditure over time, or between defence expenditures in different countries, take on a deceptive clarity that inevitably generates comparative charts and league tables. Defence expenditure as a percentage of gross domestic product (GDP), for example, becomes a tangible political symbol of the measure of economic sacrifice a country is prepared to make for its defence forces. This shows not which countries are spending most, but how much of their national wealth they are prepared to sacrifice for the sake of their defence forces. In an alliance like the North Atlantic Treaty Organization (NATO), where twenty-nine countries of different sizes and varying prosperity commit themselves to collective defence for the common good, defence as a percentage of GDP has become the only politically relevant measure to assess the level of commitment they each make to the alliance as a whole.
Headline figures
With due regard to such caveats, however, these comparisons provide a starting point for further analysis. They illuminate the different contexts through which defence costs can be judged.
Historical trends
Britain has spent varying amounts of its national wealth on defence policy. All-out wars – total wars – are economically crippling and current British defence spending is predicated on the notion that it will not fight one for the long-foreseeable future, and perhaps never again.
In the past, however, Britain has spent vast amounts of its wealth on major wars. By 1782, after more than forty years that saw Britain fight the War of the Austrian Succession, the Seven Years War and the American War of Independence the government’s public expenditure was running at almost £30 million a year, as against incoming revenue of less than £7 million (Longford 1989: 641). And, in 1811, at the height of the Napoleonic Wars, when consolidated government accounts were published for the first time, government revenues amounted to some £69 million whereas its war expenditures came to around £45 million – plus another £35 million in interest on a spiralling national debt as governments borrowed to fund the conflict (Knight 2013: 389). In 1945 at the close of the Second World War Britain had been effectively bankrupted by the conflict. In 1944, the peak spending year of the Second World War, defence directly absorbed £90 billion (in 2015 prices), some 54% of Britain’s gross national income at that time; around three-quarters of all government spending. The war had cost the country over a quarter of all its previous wealth and left its trade, manufacturing, reserves and infrastructure in ruins (Pelling 1970: 253; Kennedy 1981: 318). Even in 1947 defence was still equivalent to 16% of GDP. These were extraordinary times (Kennedy 1989: 472–6).
The mid 1950s are now regarded as times of ‘normality’ to act as a baseline for other long-term historical comparisons. Figure 1.1 shows the trend.
Figure 1.1 Defence expenditure as a percentage of GDP, 1955–2014
In 1955 to 1956 Britain spent 7.1% of its GDP on defence. There have been upward blips in the underlying downward trend since then, most notably during the Margaret Thatcher era of the 1980s. But it was 3.8% at the end of the Cold War in 1991 and the trend continued in a remarkably consistent way to 2013, since when defence expenditure as a proportion of GDP has hovered just above, and sometimes right on, 2% – the official target level set by NATO.
Historical trends show that enormous proportions of national wealth can be spent preparing to fight wars. Even in the early 1990s, a country such as Israel spent over 17% of its GDP on defence and still spends over 5% as its modern economy has boomed. If economies grow well, as the British economy did in the late 1950s, and again for more than a decade after 1985, even smaller proportions of GDP can still provide for a defence budget that grows in real terms.
Then too, warfare has evolved so much in recent decades that what defence pounds are spent on, and what they buy, has also changed dramatically. High-tech equipment has replaced massed armies as critical war-winners; sophisticated command, control and logistics have replaced large ammunition stocks; cyberwar and intelligence may be replacing destructive aerial bombing, and so on. In short, we might marvel at how fast peacetime defence spending has fallen as a proportion of GDP, but it is still plausible that spending a relatively small proportion of national wealth is adequate if it is spent on all the right, modern, war-winning technologies.
Current defence expenditure
In the financial year 2017–18 Britain allocated £36.0 billion to defence and plans to spend £39.7 billion by 2020–21. British defence ministers repeatedly point out that in absolute terms this ranks Britain within the top six defence spenders in the world, the largest in the E...