Tuesday, August 16

A curious time for parsimony from ‘best friend’ of Ukraine | defense policy

Flying to a Nato summit – at a time when there is a major war at the other end of Europe – is a curious time for Boris Johnson to be drawn into a row about defense spending, and whether a manifesto commitment has been broken.

The message from Downing St over the course of Tuesday was that a promise to increase defense spending by inflation plus 0.5% a year has become too expensive, with the cost of living at 9.1%, its highest rate in 40 years.

“We have been running way ahead of that target for a while now,” Johnson told reporters, reflecting earlier comments from Downing St that there was a need for “a reality check” given soaring costs and the aftermath of the pandemic.

But from a prime minister who has been eager to position himself as the best friend of Ukraine’s president, Volodymyr Zelenskiy, and when Britain is likely to increase its direct commitment to defend eastern Europe, the message of parsimony was unexpected.

Tonally it could not have been more different from that of Ben Wallace, Johnson’s defense secretary, who argued Russia’s invasion of Ukraine changed the calculus. “As the threat changes, so must the funding,” the minister said on Tuesday, leaving the impression of a prime minister at loggerheads with a highly rated cabinet member.

Wallace did not spell out his demand in public, and insisted he had not put any specific figures to Johnson in private either. But the Ministry of Defense was content to let a leak run overnight that the minister would like to see defense spending increase from the current 2.1% of GDP to 2.5% by 2028.

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The Institute of Fiscal Studies said that amounts to another £10bn to £13bn on a current budget of £48.2bn. And with spending plans in theory settled until 2025, after any general election, it would mean an increase of 9% a year in the run up to 2028.

One question is, how would that extra money on arms and soldiers be paid for? Would it mean, for example, cuts to the NHS to the benefit of a department with a long track record in wasting money? More likely it would mean higher taxes – perhaps why Johnson doesn’t want to have the conversation now.

But Wallace’s lobbying reflects another rhetoric to reality mismatch at the heart of British government. Johnson has long been keen to promote “Global Britain” and do all he can to help Ukraine, at a time when spending on defense in real terms is falling.

Ben Zaranko, an economist with the Institute of Fiscal Studies, said the reality of defense spending manifesto commitment all depends on the starting point.

Over the course of the full parliament from 2019/20, defense spending is due to grow by 1.5% a year in real terms. But from April 2021 it falls by 0.8% a year to 2025 – because most of the spending increase was front loaded.

Johnson reflected this as he sought to defend dropping the commitment on Tuesday. However, voters might be forgiven for thinking the Conservative manifesto said something else when it committed to increasing the defense budget “by at least 0.5% above inflation” in, crucially, “every year of the new parliament”.

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The impression given by Johnson at the time of the election was that more would be spent on defense year in year out. Yet the reality is that at the moment budgets are falling, at a time when, as the defense secretary could not help pointing out, global security is at its most uncertain for a generation.


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