Economics and the UK's Great Power Status
Tuesday 5 May 2009 at 11:52 Economic pressures are biting hard into British ability to project power. The British have finally left Iraq, handing over security control to the US on April 30th, but are committed to Afghanistan. 179 British military personnel have died in Iraq over six years and the death toll is mounting in West Asia.
Competing Pressures on Budget
There a number of fiscal issues arising here.
The expense of operations East of Suez was presumed to be worthwhile because economic growth, derived from never-ending globalisation, would pay for the interventions necessary to stabilise the lands where the wild things are. That growth has come to a grinding halt.
Projection of power also involved high expenditure along three competing lines - boots on the ground to follow through on intervention, a bigger naval presence to protect trade and energy routes and participation as leading player in the projection of European power.
On top of this were Cold War hang-overs like the independent nuclear deterrent (Trident) and demands for more budget against insurgent and terrorist threats from the security services, not excluding GCHQ budgets for monitoring the Government's own electorate.
This is a massive and mounting sum - nuclear upgrades, better equipment for the army, aircraft carriers, the Eurofighter, hugely increased 'spook' budgets ...
Tough Decisions
... and yet there has been no recent Strategic Defence Review. Few take seriously the threat of a direct assault by any other sovereign state on the island of Britain and the threat of terrorism appears to be mostly talk with any likely annual death rate less than one severe bombing raid on civilians in 1940.
Expenditure entirely depended on increased tax revenue and a politically compliant population that would not mind the steady diversion of taxes into the toys of great power status because it was living it large on easy credit. Neither the revenue nor the compliance may now be taken for granted.
The constituency for worrying about child poverty or the state of care homes had been swept aside with union connivance but, as the mafia say, 'things change'. The state of the British economy has taken all the fun out of defence procurement and it will soon direct attention back to social problems
The Government's refusal to undertake a full Strategic Defence Review until after the next Election creates an illusion of business as usual until the crunch in government spending really takes hold from 2011. This is purely tactical - a hope against hope that New Labour can bluff its way back in 2010.
Government strategy has been reduced to stalling on big decisions wherever it can, kite-flying on the possibility of killing off big projects like Trident (in the context of some US-led wider nuclear disarmament treaty) and spending high now to achieve some short term objective and then get out.
West Asia - A Race Against Time
Take West Asia. UK policy has three components - don't upset the Americans, don't spend any more money than necessary and hope that the Americans can pull off their Iraq trick and allow the British to get out in 2010, preferably just before an election, with honour intact if not enhanced.
The UK has just published its new medium term strategy for Afghanistan and Pakistan to bring it into line with US policy in the area. It will send a temporary extra 700 troops to Helmand to help provide security for the presidential election in August.
But the Army is not happy. Gordon Brown vetoed any further UK involvement in the US troop surge in Afghanistan much to the consternation of commanders on the ground. Their immediate demand for 2,000 more troops was curtly rejected.
The issue of military anger ('incensed', according to the Financial Times) at the Government’s decision is an interesting one because there seems to have been a sustained campaign by the Army to embarrass the Prime Minister in the media.
To some extent, this military anger is a righteous irritation with a failure to resource it properly on mission. To some extent, it represents anger that lack of available force means that Helmand Province will soon become a wholly US command and that Brits will be ordered around as their juniors.
But behind this is the fear that the military may be cut back in favour of aircraft carriers and aircraft in the post-election Strategic Defence Review (probably undertaken by the Tories). If funds are committed to the big toys now, the incoming Government may be faced with a fait accompli.
The Old 'Guns versus Butter' Debate
Boots on the ground ensuring a victory might have been an argument for spending more on soldiers in the future, regardless of the fact that, if the UK can no longer afford a Blairite policy of global humanitarian intervention, there is really not much point in having much of a standing army at all.
The Financial Times sided with the military this week, criticising the Government for trying to conduct war ‘on the cheap’. This is a little naïve about a domestic situation where there is no stomach for massive transfers of funds and loss of lives at a time of economic crisis.
Extra funding was promised to help Pakistan’s counter-terrorism operations as well as education and economic assistance, with pledges of £665m over the next four years. Yet, privately, respected intelligence analysts are telling MPs that the UK should just scuttle from West Asia as fast as possible.
British citizens might legitimately wonder why £665m of their taxes are going to improve education overseas when everyone knows that there will be serious cut-backs in education and in other services at home within that same period to assist in a war that might be supposed to be none of our business.
Case Study in Crisis - The Eurofighter Programme
The end of the days of fiscal wine and roses is not restricted to its effect on overseas operations. The UK has declined to pay £1bn towards the Eurofighter Typhoon jet programme on demand amidst European anger. It will now come to a decision by May 15th and it is not an easy one to make.
Brown was personally called by Merkel, asking him to keep to a commitment for a programme conceived in the Cold War (mid-1980s) and probably of no real use to the UK compared to the more immediate requirement to balance the economic books.
There will be more European protests. Anxiety in Berlin relates to its own domestic politics and should not detain us. The bottom line for us is that the British were quite prepared to bung a £1bn wad towards the European attempt to be a strategic power in its own right as an entry price to the game.
Now the Eurofighter looks like a great white elephant, economically and potentially politically, a grand European project which is really a luxury item and, in fact, the pursuance of continental industrial policy by other means.
Its supporters are increasingly reduced to warning of the effects of a failure to proceed on an industry which provides 40,000 jobs. This is important politically when the main union involved is central to the New Labour project but the argument does not have a great deal to do with national defence needs.
A £1bn subsidy to the defence sector is going to upset a lot of people. Those seeing public spending cuts and future tax rises and those sectors who have not received Government help, notably the rival automotive sector which has had minimal assistance, are not going to be well pleased.
Political Tensions
The military, who would rather have the money spent on improved equipment for missions like Afghanistan, are opposed and have friends in the Tory Party. Drifting liberal and left supporters of the Government, many on the cusp of walking out of the Labour coalition altogether, will not see the point.
The decision affects the Treasury (public finances), the Business Department (industrial policy) and the Ministry of Defence (allocation of limited resources), while pressure from European partners involves the Foreign Office. Eurosceptics could have a field day in the run-up to the June 4th vote.
The UK defence industry is getting equally irritated with the Tory Party’s alleged plans (as yet very unclear) to cut expenditure on defence. Tories are giving private assurances that certain programmes are safe (presumed to be the aircraft carriers) but, in public, the opposite impression is being given.
The Tory Party has the same problem as New Labour. It likes to talk tough and has its own services constituency but it also needs to win and hold power amongst a population who will not take kindly to high taxes and poor services if taxes only mean funding the military.
Prospects
We now have the prospect of two years’ of struggle by the defence and security services and industrial interests to sustain the ‘guns’ budget against some increasingly desperate social demands from the 'butter' interest, with each defence interest squabbling, in turn, over access to what remains.
Unlike the Edwardian era when German dreadnoughts threatened an empire, the 1930s when fascism looked to conquer Europe or the Cold War when Cossacks with snow on their boots threatened to reach the Channel, there are no serious national enemies on the horizon other than a few terrorists.
All in all, unless the 'guns' lobby comes up with a really good scare, they are going to find it harder and harder to compete with any democratic mandate for sustaining the welfare state and resisting tax increases. And perhaps quite right too ... unless, of course, some extraterrestrials arrive on cue.
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