Good morning, and good luck making sense of the following sequence of events: first, well sourced reports that defence secretary Ben Wallace is asking for spending on the armed forces to be increased to 2.5% of GDP. Then, the head of the army saying we’re in a “1937 moment” and need to urgently replenish our forces. And then, the government ditching its manifesto commitment to increase spending by 0.5% above inflation.
Then, Wallace denied he asked for that 2.5% commitment in an interview, but sounded pretty critical of the government’s approach. Then, Boris Johnson insisted the 0.5% target would be met this year, around the same time that Wallace made a speech saying that “as the threat changes so must the funding”. And this morning, the Daily Telegraph reports that Downing Street was “furious” at Wallace’s speech and intervened to water it down.
Confused? You should be! Today’s newsletter will try to straighten out those percentages, and decipher what it means for the future of our armed forces – with the help of IFS senior research economist Ben Zaranko, who is as clever as his job makes him sound, but less intimidating on the phone, happily for me. That’s after the headlines.
Five big stories
Climate crisis | The government is failing to enact the policies needed to reach the UK’s net zero targets, a statutory watchdog has said. The Climate Change Committee’s damning progress report said there was “scant evidence of delivery”.
US news | Ghislaine Maxwell was sentenced to 20 years in prison in New York for procuring teen girls for Jeffrey Epstein for him to abuse. Maxwell, 60, told the victims she was “sorry for the pain you experienced” but did not acknowledge responsibility.
Scottish independence | Nicola Sturgeon has set herself on a collision course with Downing Street by asking the supreme court to rule on the legality of a new referendum on Scottish independence without Westminster’s permission. Many lawyers believe the court will view such a referendum as unlawful.
Nato | A last minute agreement has been reached between Turkey, Finland and Sweden to allow the two Nordic countries to become Nato members on the eve of the military alliance’s summit in Madrid.
UK News | Dame Deborah James, the teacher turned podcaster who campaigned to raise awareness of bowel cancer, has died, her family has said. She had raised £6m for cancer research since announcing she was receiving end of life care last month.
In depth: Making sense of our armed forces’ future
Is Ben Wallace on the warpath? No 10 will fear so as he tours the broadcast studios this morning. He does so ahead of Johnson’s speech to the Nato summit in Madrid, where he’ll claim the UK already spends 2.3% of GDP on defence and call on others to match it. It all has the makings of a properly consequential political row. Here are some essential points to bear in mind as they each set out their stalls:
The UK has increased defence spending recently – but it’s still historically low
In the mid 1950s, UK defence spending was about 8% of GDP. “That’s a huge chunk of what the government does,” said Ben Zaranko. That figure fell sharply to 4% of GDP in the 1970s, and has continued to fall ever since.
“It’s been hovering around 2% since the early 2010s,” said Zaranko. (Johnson’s 2.3% claim includes aid to Ukraine, which others, including Nato, would consider a bit misleading.) The mooted 2.5% figure would “return us to where we were in the mid 90s, but still shy of where we were at the end of the cold war, when it was 3% of GDP”.
Above is an IFS graph that makes all that clear. (Click here to see it up close, but if you squint a bit at the general direction of the line you’ll get the idea.)
In the short term, said Zaranko, “the MoD can use Treasury reserves to meet unexpected costs – that’s what happened in Iraq and Afghanistan. But there’s another question: has Russia made the world a more dangerous place?”
There is a way to increase defence spending at the same time as decreasing it (sort of)
Ben Wallace had a very busy day, and his demand for the need to boost the military budget have been what the Spectator called “increasingly indiscreet” in recent months. He did deny at a New Statesman event on Tuesday that he had asked for an increase in defence spending to 2.5% of GDP, but said that “he’d done what any secretary of state would have done” by asking for “a discussion” about more money. Then he made a speech to the Royal United Services Institute (RUSI) saying that the army is surviving on “a diet of smoke and mirrors”, among other unsubtly disgruntled formulations.
According to the Telegraph, No 10 intervened to ask Wallace to remove a line saying that spending 2% of GDP on defence was outdated. But this story by Peter Walker and Dan Sabbagh quotes a senior government source saying that a manifesto commitment to a 0.5% increase in spending every year in this parliament was now subject to “a reality check”. Johnson later seemed to fudge that by saying that the target would be met if inflation is measured over the long term, not annually. What’s going on?
The first thing to know in trying to make sense of this is that most of that increased spending was distributed to the early years of this parliament. “They frontloaded the increases quite massively,” said Zaranko. “So you have a very significant increase in the first and second year … then it was set to be broadly maintained. And now higher inflation means it will fall a bit.” He also points out that the decrease has been slated for some time.
The government could make an additional longer term commitment – but it would be steep. Zaranko estimates that to hit Wallace’s alleged 2.5% ask by 2028 from the current level of around 2%, you’d have to increase spending by about £10bn, or 9%, each year – a sum which it sounds like Boris Johnson and Rishi Sunak would be unwilling to entertain.
That money might not go as far as it sounds
In a recent IFS podcast, Malcolm Chalmers, Deputy Director-General of RUSI, said that if funding increases, “in the short term I think making the force we have more effective is going to be a strong priority.”
That was echoed by a speech to that same RUSI conference yesterday by Chief of the General Staff General Sir Patrick Sanders in which he said that “deterring Russia means more of the Army ready more of the time.” (“To put it bluntly, you can’t cyber your way across a river,” he added.)
But before any new investments, the military faces the same costs causing pain for everyone at the moment: inflation and energy. The military is “particularly exposed to things like aviation fuel, and it has lots of barracks to keep warm,” said Zaranko. “Those are significant pressures. A far bigger one will be what happens to their pay bill.”
The government would probably raise taxes to pay for it
At least for now, there’s no likely scope for cuts to other government departments or borrowing. “In the medium term you might just spend less on other areas,” said Zaranko – but he thinks that’s unlikely when public services are creaking. “A more realistic outlook is that taxes would have to be higher.”
Wallace, as a former soldier, noted that the so-called “peace dividend” from cutting the military has funded other spending for decades. Here’s another IFS chart comparing health and defence budgets which makes that clear (again, click here if you want to see it in more detail):
“I was that soldier in 1991 when the cold war came to an end and the Treasury took their peace dividend,” Wallace said. “They’ve kept taking it. They keep taking it every year.”
Whatever happens, the terms of the debate on military spending have shifted
Probably the most remarkable index of the way priorities in the west have been reshaped by Russia’s invasion of Ukraine is in Germany’s new commitment to defence spending – with the infusion of a massive new €100bn (£85bn) fund to boost its armed forces. That is a historic shift, and raises a big question over whether the UK lets Berlin pick up some of the slack within Nato, or keeps pace to maintain its global influence.
The course of the war has forced the British military to “re-think how we fight”, Sanders said, promising a “new doctrine”. But that will cost money – and the mixed messages coming out of government about what it is prepared to spend suggest that the debate over the future of the armed forces has a long way to run.
What else we’ve been reading
Claire Armitstead meets Liz McGregor, a journalist who spoke to her father’s killer. The man still contends he is innocent and will not reveal what really happened and why, leaving McGregor and her family with questions that may never be answered. Nimo
As the BBC’s acclaimed series Sherwood comes to an end, its author James Graham writes that he wanted to explore how communities can be split for many years by divisions sown by governments and others for short-term gain - “a tactic that we must resist at all costs”. Archie
I’m a sucker for writing about mad endurance sports, and Sophie Ranson’s piece about the Barkley marathons – a 100 mile race with 15 finishers in 36 years – definitely meets that description, with a start that is signalled by the race director lighting a cigarette and a, er, “human sacrifice”. Archie
Corporations have pledged to pay for employees living in US states with abortion bans to travel to ones that haven’t. Arwa Mahdawi argues that this seemingly progressive and positive move will have troubling consequences for workers. Nimo
Victoria Namkung explains why our favourite food staples are disappearing from shelves – or costing far more than they used to. Nimo
Tennis | Serena Williams lost an epic first round encounter to Harmony Tan while nine British players have reached round two, the best result since 1997. Meanwhile, the tournament’s Covid-19 protocols are under review after last year’s runner-up Matteo Berrettini was forced to withdraw following a positive test.
Cricket | Michael Vaughan has decided to “step away” from his work as a cricket commentator at the BBC after staff said the decision to re-hire him despite claims he made a racist comment at Yorkshire cricket club was “totally inexcusable”. Vaughan, who denies the claims, remains on contract with the BBC.
Cricket | Centuries from Nat Sciver and debutant Alice Davidson-Richards helped England post 328 for six on day two, a lead of 44 runs, in their test match against South Africa.
The front pages
Ghislaine Maxwell’s sentencing features on most front pages. The Express has “Maxwell gets 20 years in jail for ‘heinous’ crimes” and the Daily Mail says “Maxwell: 20 years jail – but she’s still in denial”. The Mirror runs the subheading “Downfall of a socialite’” above its splash “Andrew ‘is next target’.”
The Guardian leads with “Sturgeon in bid for new referendum in late 2023” and i newspaper goes with “Sturgeon’s new bid to split for the UK”. The Times says “Watchdog puts Met in special measures” while the Telegraph reports “PM face Cabinet battle over defence spending”. The FT says “Trump wanted to join armed mob on Capitol Hill, aide says.”
Most papers also pay tribute to Dame Deborah James, with Sun dedicating its front page to the cancer campaigner and the headline: “Dame Debs dies”.
Today in Focus
Ukraine: counting the cost of a long war
President Zelenskiy has urged G7 leaders to urgently send more heavy weapons to Ukraine to bring the war to an end before winter. But, as Dan Sabbagh reports, there is no clear resolution in sight
Cartoon of the day | Martin Rowson
A bit of good news to remind you that the world’s not all bad
For years Bolivia has suffered from a high rate of femicide – in 2021 the country had one of the highest on the continent. Systemic corruption and violent misogyny has fuelled a feminist movement that is fighting back.
One of the people at the front of these protests and civil action is María Galindo, founder of Mujeres Creando, a feminist collective in La Paz. She has done everything from storming state institutions, questioning civil servants on social media about what they’re doing to make Bolivia a safer country for women, to cataloguing ignored reports of gender violence.
The Bolivian government has responded to the social pressure by setting up a commission to re-evaluate violent offences against women. “No one can buy us,” says Galindo, “we are incorruptible.”
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