Following World War One and the economic shock of The Great Depression in the 1930s,
military spending among European nations was reduced.
The spending cuts would later expose the gulf in military might between Nazi Germany and
the allies, which were forced to rapidly ramp up defense spending.
Decades of relative peace followed after the end of World War Two, and with it, military spending fell.
In 2006, NATO members agreed to spend 2% of their GDP on defense.
This pledge was renewed in 2014, when Russia annexed Crimea.
As of 2022, only 9 countries out of 30 members had fulfilled that promise.
Even defense spending in the U.S., as a percentage of its economic output, is at historic lows.
From 9% of its GDP in 1960, military expenditure in the country is now equivalent to 3.5%,
which still totaled over $800 billion in 2021.
Since Russian troops poured into Ukraine and China asserted itself more forcefully
in Asia, European countries have announced a ramp up of their military spending.
The UK’s military forces must be geared primarily in Europe, including against that
threat from Russia, we want some global capability.
But that's less important than making sure we're ready for war in Europe.
If we don't stop the Russians in Ukraine, we'll have to stop them in the Baltic States or in Poland.
And that means a large, whole scale conflagration between NATO and Russia.
And nobody really wants that.
With the escalation in Ukraine at the moment, I'm really worried that we risk spiraling
into a global war, even a nuclear war.
But are these spending increases too little too late to bolster the defense of Europe,
and are they sufficient as a deterrent?
This is the Ajax.
The project for the state-of-the-art armored vehicle was launched in 2010, with 589 units
planned to enter service with the British army in 2017.
However, only 26 Ajax vehicles were delivered by the end of 2021.
As the Ajax program progressed, it was found to have numerous safety and technical issues.
These included excessive noise and vibration that led to injuries, sections with inconsistent
lengths, and problems with reversing.
But arguably, its biggest problem is its rising cost.
In 2014, the UK government signed a £5.5 billion contract with U.S. defense contractor General Dynamics
to make the armored vehicle, but the project is expected to cost
the taxpayer more than £10 billion, double the original budget.
The Ajax is a very good example where a lot of mistakes were made early on in the project.
The Minister of Defense does not have a good record at managing these large complex programs.
All of those very large acquisition projects, they tend to be very complex, because they
involve a wide variety of different stakeholders, they also involve, often, cutting-edge technology.
And therefore, there is often a lot of risk, and in some ways, that management of risk
is difficult to do.
So, if the development of new military equipment is challenging, how is that investment mapped out?
Factors determining defense budgets include the international threat environment,
relative spending of rivals, global economic conditions and geography.
Defense budgets are also affected by electoral cycles, forms of government, public opinion,
civilian-military relations, and domestic economic conditions too.
The difficulties surrounding the Ajax armored vehicles are not uncommon.
In fact, project cost overruns and delays are frequent in the defense sector.
A study of 95 weapons system programs by the U.S. Government Accountability Office in 2008
found that budgets overran by an average of 26 percent in 2007 and had average delays of 21 months.
Procurement means that strategies and the need for equipment must be considered well
in advance of operations.
Following Russia’s annexation of Crimea in 2014, should spending have been increased earlier?
Over the past, perhaps the threat environment was understood differently.
We had a time when obviously, we were active in Afghanistan and Iraq, where some of the
major threats were more in relation to violent extremism and terrorism and state-based threats
like we are facing in Ukraine at the moment perhaps haven't been prioritized as much.
After September 11 for instance, the focus of defense spending moved away from conventional
warfare to the increasing threat of terror attacks.
And in 2021, a shift in the defense strategy meant real cuts to the British Army to favor
investment in cyber warfare.
The British army is just not fit for purpose.
It's certainly not fit for the purpose of large-scale mechanized warfare.
If the British Army had been one of the parties to this at war in Ukraine, it would have run
out of artillery shells, within a matter of days.
Far too many of our military systems come into service years late, or way over their
original budget, or both.
We now have a barbaric invasion and a brutal war on the European continental landmass,
only several hundred miles from our own shores.
I don't think we could ignore that.
So I think we need, A, to increase the amount of money that we spend on defense.
But B, we also need to spend the money that we do have much more effectively.
Yet, the UK had the fourth biggest military expenditure worldwide in 2021.
So how is that money being invested?
According to a 10-year equipment plan by the UK’s defense ministry in 2022, the biggest
investment for the next decade was attributed to the Defense Nuclear Organization,
which oversees the country’s nuclear deterrent such as submarines and Trident missiles.
Even though the Army and Air Force would see their budgets cut, the British government
spending watchdog noted that the report was based on “optimistic assumptions”
and failed to reflect "significant and growing cost pressures.”
Defense budgets are, ultimately, a product of political institutions, and will be impacted
by domestic politics, the relationship between the Ministry of Defense and the Treasury,
and fiscal pressures, like other government departments.
Ultimately, the kind of broader focus that will shape how much defense will spend or wants
to spend is always going to be determined by that strategic understanding of what are
the threats that we're likely to face, whilst also fighting for your little part of the
budget which you need to constantly justify because it is obviously public money.
There is a need for UK Ministry of Defense, the armed forces as well as the defense industry,
to have that kind of open dialogue with the public to explain a bit, "What is it that defense does?"
But according to market research firm Ipsos, six months after the start of Russia’s war
on Ukraine, only a third of British adults thought that government spending on defense
should be increased, while 18% felt that spending should be reduced.
When it comes to defense, if we think about what makes people secure, we think about enough
to eat, a decent wage, a sense of community, healthcare, education.
and reducing security to a question of how big your government's army is, devalues that whole notion.
While most European governments have now increased their defense budgets,
how much investment is enough for a country to be secure?
After decades of “peace dividends” following World War Two and the Cold War,
government coffers were prioritized for the welfare state.
In between recessions and rising cost pressures to fund social spending,
military budgets were easy targets for cuts.
But when economies recovered, military budgets did not increase in tandem.
An analysis of military spending since World War Two noted that “military budgets require
more time to recover from an economic downturn than to benefit from economic growth”.
The immediate pressure on our defense budget is the level of inflation for defense is much
higher than was anticipated.
So, in real terms, we’re to see a reduction in our defense budget over the next couple of years.
It's hard to see a way in which the UK could significantly raise proportion of its GDP
spent on defense to 2.5%, never mind to 3%, without also agreeing to a significant rise
and in general taxation.
Raising it even higher will divert resources away from other things that are vitally needed,
tackling poverty, tackling the crisis in the National Health Service, providing humanitarian aid
overseas, supporting refugees coming from Ukraine, and it can only add to fueling military
tension around the world.
We are moving into more of an era of strategic competition, whether that's with the emergence
of China, particularly in the Indo-Pacific and sort of regional influence and dominance.
It is very much a question of, how do we understand the strategic environment and what does our
response need to be?
Whether today’s military spending decisions provide value for money won’t only be judged
right now, but also in the decades to come.
The decisions that you make today are very much going to influence what you're going
to be operating in the next 20, 30, even 40 years.
For example, what kind of fuels are we going to use?
Some of these decisions we need to make today are already having to consider much,
much broader future focused implications.