David Fuller's view -
As regular readers know, I am not in the habit of recommending large increases in public expenditure. On the contrary, I want public spending to be kept under a tight rein so that the tax burden can be reduced, with consequent benefits from improved incentives and efficiency. But there is one area where I feel strongly that the British Government is not spending anywhere near enough – defence.
Over recent decades it has been common for the public, egged on by politicians, to expect the state to solve just about every sort of problem in their lives. This statist philosophy derives from a failure to understand the appropriate role of government in the economy and society. For most sorts of economic activity, and a good deal of the rest of national life, government’s primary job should be to keep out of it.
But there are several things that only the state can properly provide. Prime among these so called “public goods” is defence. Yet in the UK, defence spending has fallen sharply as a share of GDP. It is currently rumoured that the number of Royal Marines is about to be cut severely in order to save money. Meanwhile, the Royal Navy’s much depleted warship strength may also be reduced.
This potential scaling back is not because of any assessment that the threats to the UK’s security have diminished. On the contrary, they have surely increased. It is driven entirely by the urge to save money, accompanied by the hope (fingers crossed!) that the UK, its dependent territories or its allies won’t face attack. This is economism gone mad. Sometimes economic considerations should take a backseat.
Admittedly, the latest squeeze is prompted by the need to fund the construction of two large aircraft carriers. But the “economy drive” is nothing new. Before Mrs May took over as Prime Minister, the Cameron–Osborne duo devastated Britain’s armed forces in a bid to save what turned out to be comparatively small amounts of money. Meanwhile, quite apart from whatever they squandered elsewhere, they continued to honour the pledge to spend 0.7pc of GDP per annum on overseas aid, which has been enshrined in law.
This is nonsensical. Unless the May–Hammond duo wish to go down in history as similarly complacent about the UK’s protection, this law needs to be repealed and a substantial part of the money saved should be redirected towards the defence budget. Being largely spent in the UK, this extra money would boost aggregate demand and create jobs, especially in manufacturing.
Something similar is true of relations with the US. The more we can persuade the Trump administration that we have serious military capabilities to deploy in conjunction with US forces, the more likely it is that the US will put effort into securing a favourable US–UK trade deal, which would probably lead on to other favourable trade deals around the world.
More fundamentally, military service brings large benefits to society, benefits that most members of recent British governments, with scarcely any military experience or connections, have failed to appreciate. Traditionally, people from working class backgrounds have gained a sense of discipline, self-worth and identification with the wider community through serving in the armed forces. Many of them have acquired trades and traits that have helped them to secure employment once they have rejoined “Civvy Street”.
With globalisation and technological progress eroding traditional job opportunities, the potential contribution to human development from military service has increased. Yet there has probably never been a time in the UK’s recent history when the proportion of the population serving in our armed forces, and the corresponding extent of their influence in society, have been so low.
Brexit isn’t the only challenge facing Mrs May. If she does not restore a good part of the UK’s fighting capability she will be judged by history as failing in a central part of her duties.
I am pleased to see Roger Bootle state these views, especially when it is fashionable in many European countries to say that defence spending is a waste of money and unnecessary. I also favour 2-year conscription (draft system) for all males. This builds character at all levels of society by putting the nation first. Among the larger economies within democratic Europe only the UK and France pay the minimum on defence of 2% and this really should be increased.
This item continues in the Subscriber’s Area with a review of some defence shares and also a PDF of Roger Bootle’s article.
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