How much GDP does Britain spend on Defence?
|Year||Defense spending as share of British GDP|
Britain’s Down-Payment Defence Review
“We have, as the House is aware…a very great problem [German and Japanese rearmament]…that will have to be met in the next four to five years and, as we go on to meet those conditions, one of our greatest problems will be to consider whether such measures as we have taken hitherto will be sufficient”. Prime Minister Stanley Baldwin, House of Commons, 24 February 1936
Refresh or re-hash?
March 17th, 2023. What should the world’s fifth or sixth largest economy spend on defence and what kind of force does it need given its location, the threat array it faces, and the alliances and partnerships Britain needs to leverage?
On launching the Integrated Review Refresh (IR2023) Prime Minister Rishi Sunak described Russia as the greatest regional threat to Britain’s security which was in turn intrinsically-linked to the outcome of the war in Ukraine.
He also said that China “poses an epoch-defining challenge”. Given the scale of the challenges implicit in those statements compared with the money London is prepared to further invest in defence the IR2023 is yet another down-payment on defence, a down-payment on future war, a down-payment on future alliances, and a down-payment on the warfighting lessons from Ukraine for which most of the British armed forces lack the critical capability and capacity. Above all, IR2023 is yet another down-payment on Global Britain which if it is ever to be anything more than empty political rhetoric will require London to invest far more in defence and far more efficiently.
Given the centrality of China to Britain’s Integrated Review Refresh it is interesting to compare and contrast “IR2023” with President Xi Jinping’s “Great Wall of Steel” speech this week. China’s President was uncompromising: “We must fully promote the modernisation of national defence and the armed forces, and build the peoples’ armed forces into a Great Wall of Steel that effectively safeguards national sovereignty, security and development interests”, during which he announced a further 7.2% increase in the Chinese defence budget to $224 billion (in fact China already spends far more). This is a year-on-year increase of some $15 billion. Britain, on the other hand, will increase its defence expenditure of $70.2 billion by $6 billion by 2025, with a “somewhere over the rainbow” promise to spend 2.5% of a $3 trillion economy bit only if “fiscal and economic circumstances allow”. They never do.
One could argue that given China’s official defence budget is only some 1.5% of Chinese GDP Britain’s hike is reasonable. That is not the case. First, China’s nominal GDP is $14.14 billion, whilst its “usable” GDP (Power Purchasing Parity) is $27.31 trillion, whereas Britain’s ‘PPP’ is only $3.78 billion. The map above is interesting in that it shows GDP per capita and confirms the extent to which China is a developing nation and Russia is close to being a failed state.
Economists would suggest that as a consequence neither China nor Russia really poses an existential threat to either Britain or its allies. Unfortunately, economists by and large fail to understand why wars start. Still, China is a large country far away about which we know little so what should it matter. China is gearing up to confront the United States in the Indo-Pacific. Given the centrality of Washington to London’s security and defence planning assumptions, anything that impacts on the US impacts on Britain and NATO. China is impacting big time on US defence policy. Just read the new National Defense Strategy 2022.
Plus ça change?
Lord Richard Dannatt, the former head of the British Army, likened the state of Britain’s armed forces of today to those of the 1930s. In fact, and as someone who wrote his Oxford thesis on that very subject, the situation could be even worse. On March 23rd 1932, Britain scrapped the so-called Ten Year Rule by which Britain could assume that it would not be involved in a major war for the next decade and reduce defence expenditure accordingly. In February 1934, Britain began rearming and over the next eight years both modernised the Royal Navy and created the world’s most advanced air defence system which the Luftwaffe discovered to its cost in 1940.
The British Army by and large lost out. There were several reasons for this, perhaps the most telling of which was a political determination in London never to the trenches of World War One in which several of Britain’s leaders had fought between 1914 and 1918. And, although the British had in 1918 invented ‘Blitzkrieg’, or the ‘All Arms Battle’ as it was known, by 1935 the British Army had resorted to being what it had been since 1815, an imperial policing force.
Consequently, in May and June 1940 Lord Gort’s British Expeditionary Force (BEF) only represented 10% of the Anglo-Belgian and overwhelmingly French forces defending North-West Europe. When the French fortress of Sedan fell on May 15, 1940 Gort’s force was simply too small and lacked the necessary joint fighting power to act as an independent force and was forced to retreat to Dunkirk where it lost the bulk of its equipment. Whatever the quality of the BEF it was simply too small and too under-equipped to make a qualitative difference on the ground in the face of the Wehrmacht’s onslaught.
Drill down into IR2023 and the facts are revealing. Almost $4 billion of Britain’s $6 billion defence uplift will go towards nuclear defence, particularly support for the clumsily-named SSN-AUKUS (if the French get involved will it become SSN-FAUKUS?) which is planned to replace the current Astute-class from mid-2030s even though these admittedly excellent submarines are still in the process of being delivered. In other words, Britain will not see the fruits of much of IR2023 until probably the 2040s and that $4 billion is thus a down-payment on a future submarine system with little impact today.
The cost of Ukraine
What is relevant today is the planned £2 billion to be spent on replenishing munition stocks depleted by transfers to Ukraine, thus reinforcing the £560 million announced in 2022. The implication being that IR2023 is also a down-payment on the lessons being learnt from the Russia-Ukraine War. However, given the extent, scope and cost of those lessons it is not much of a down-payment given the nature of those lessons which explains why Ben Wallace, the Secretary-of State for Defence was seeking a $13.25 billion hike, rather than the $6 billion on offer.
Learning the lessons of the war in Ukraine will cost the British a lot of money if London is to transform the British Army from counterinsurgency policing to full-on warfighting as both IR2023 and Integrated Review 2021 suggest it will. Given the size of Britain’s population any future war will always cast Britain as Sparta to Athens, Ukraine to Russia.
Britain’s defence-industrial capacity is woefully small compared with the 1930s. British forces will also need far more robust logistics far more forward deployed, with enhanced and far more secure military supply chains particularly important. That is perhaps why there are echoes in IR2023 of the 1936 Shadow Factory Plan which was critical, for example, to Britain out-producing Germany in combat aircraft as early as June 1940. Britain will now invest in “munitions infrastructure” to accelerate the acquisition of ammunition which has been consumed at a far higher rate in Ukraine than expected.
British forces will need to make far better use of technology to authorise action at the lowest level possible of mission command. A flat-line command and control structure will also be needed to reinforce redundancy in command and avoid decapitating strikes against the command structure. Land warfare is also becoming like submarine warfare with concealment, stealth and sudden strike now at the core of warfighting doctrine with a shift also taking place towards so-called “Über-targeting” with the best-placed unit given command authority to strike at their discretion to ensure a larger enemy is kept permanently off-balance. All of the above will require force transformation and should ideally see such investment beginning now.
Improved force protection will also be vital with a particular need to reduce the digital footprint of force concentrations (‘bright butterflies’). The vulnerability of armour unsupported by infantry and helicopters in the battlespace is been all-too-apparent and Britain lacks sufficient numbers of all three, especially so given the need to dominate both fires and counter-fires. The vulnerability of deployed forces to expendable drones, strike drones and loitering systems armed with precision-guided munitions is also abundantly clear. Enhanced land-based, protected battlefield mobility will also be a core British requirement together with increased force command resilience given how often the Ukrainians have been able to detect and ‘kill’ Russian forward (and less forward) deployed headquarters.
Agility or fragility?
Beyond Ukraine? Integrated Review 2021 focussed on future agility at the higher end of the conflict spectrum, primarily to reinforce London’s weight in NATO and Britain’s importance to, and thus influence with, the US. At the core of the military-strategic thinking behind IR2021 was creation of a fully-interoperable, deep joint, global reach if need be future force able to better share transatlantic security and defence burdens. AUKUS will be central to such future force. That was the essential message from this week’s meeting in San Diego, home of the US Pacific Fleet, at which Sunak stood alongside Australian Prime Minister Anthony Albanese and US President Joe Biden. The three leaders announced that Australia will purchase between 3 and 5 US Virginia-class submarines, as will begin work in Australia and Britain on building SSN-AUKUS using US technology.
Moreover, it also became implied that Britain will increase its future fleet of nuclear-powered attack submarines from the 7 Astute-class boats to 15 SSN-AUKUS. It is all very impressive on paper but if Britain is to meet the procurement challenge implicit in AUKUS it will need to markedly improve the performance of its Submarine Delivery Agency. The gap between each of the seven Royal Navy Astute-class boats has been so long that each submarine is literally in a class of its own!
IR2023 and NATO? The New Force Model at the heart of NATO’s Military Strategy calls for the enhanced NATO Response Force of some 40,000 troops to become transformed into a future force of some 300,000 troops maintained at high alert, with 44,000 kept at high readiness. At American behest the new force will be mainly European.
A force of that size and with the necessary level of fighting power would normally mean that with rotation there would always be a force of some 100,000 kept at high readiness, which will be extremely expensive for NATO European allies grappling with high inflation and post-COVID economies. A NATO standard brigade is normally between 3200 and 5500 strong. Given that both air and naval forces will also need to be included, a land force of, say, 200,000 would need at least 50 to 60 European rapid reaction brigades together with all their supporting elements. At best, there are only 20 to 30 today. Britain?
Back to the future?
What must be done? In November 1933 the Defence Requirements Sub-Committee (DRC) was formed to consider the shortfalls and deficiencies in Britain’s then armed forces. A new version of the DRC needs to be stood up as a matter of urgency.
Britain’s defence procurement is also (eternally) in desperate need of root and branch reform. Last October’s Future War and Deterrence Conference, which I had the honour to direct, was clear: “A new and far more interactive and proactive partnership is needed between government, defence industries and the wider military supply chain. Such supply chains also need to be made more robust and secure. The pace and scale of political, economic and military-technical change risks undermining Allied cohesion, force interoperability leading to increasingly unbalanced security and defence planning in democracies. Effective long-term project management is a particular lacuna”.
For both IR2021 and IR2023 to be credible acquisition cycles will need to become markedly accelerated. There is also profound tension between the acquisition of platforms and systems. For example, the acquisition of new military platforms in Europe is on average 5-7 years whilst technology evolves every 5-7 months. As the war in Ukraine is demonstrating, European states in particular simply lack the defence industrial capacity to ramp up production immediately and rapidly. Only something akin to the British Shadow Factory Plan will do so. The Plan enabled London to place the British economy on a war footing and rapidly increase war production in September1939. And here is the crunch. IR2023 implies Britain must prepare for war but with a determinedly peacetime mind-set.
Does the UK defence strategy implicit in AUKUS make sense? IR2021 had much to be commended, innovative thinking was built into its DNA with digital manoeuvre and space reach considered across the emerging hybrid war – cyber war – hyperwar spectrum, whilst at its core was the vision of a US-interoperable high-end British future force. IR2021 also considered security in the round, i.e. the effects Britain needed to generate from the entirety of its security investment and the role of defence therein. The key word ‘integrated’, the use of all national means including defence to secure Britain and its interests.
Unfortunately, the ends, ways and means of IR2021 did not add up and nor do they for IR2023. The major lacuna is the lack of new money for the Royal Navy, the Royal Air Force, and above all the British Army. Consequently, British will continue to do what it has been doing since the 1998 Strategic Defence Review and the creation of the hideously misnamed ‘Smart Procurement”: the sacrifice of contemporary mass to pay for ill-defined digital manoeuvre, the here, now and tomorrow for some ill-defined future. In 2010, the British went further and took an axe to Britain’s armed forces even though they were in the midst of a major campaign in Afghanistan.
And yet, Sunak said this week that Britain’s defence policy rests on “the quality of relationships with others”. However, important the relationship with Australia it is the relationships with Britain’s NATO Allies that must come first. First, because Sunak has placed NATO at the heart of British defence policy. Second, Britain is a European regional-strategic power. The most striking paradox of IR2024 is that by continuing to sacrifice contemporary mass for future manoeuvre London is effectively binning its commitment to the land component of the NATO Defence Plan and the 2019 NATO Military Strategy.
Britain’s down-payment defence review
The strength of the Integrated Review process is that it envisions security, intelligence, influence and defence in the round and attempts to understand and respond to the changing character of the new hybrid, intelligence, and cyber ‘permawar’ the Britain is daily fighting, as well as deterring a possible future war. The weakness is a culture of government in London that sees Britain’s public finances as the first line of defence rather than Britain’s armed forces. This basic misconception exaggerates the importance of soft power and underestimates the utility of hard power as the essential commodity in national influence.
Consequently, funding for defence is what is left over after other instruments of power – economic, diplomatic and development – are afforded. And, even though defence is the fifth largest expenditure from the public purse it is simply not enough to meet the ambition implicit in IR2023. This is because Britain and all the developed democracies are engaged in a clash of wills with autocratic powers such as China and Russia. Russia might be down but it is certainly not out, particularly as a hybrid and cyber warrior. China is not Russia and may be reasoned with but Xi’s Great Wall of Steel speech still reveals a Middle Kingdom only just beginning its Long March to geopolitical power.
Furthermore, the reasons a country like Britain invests in defence do not simply concern national defence.
A relatively strong British defence effort buys influence inside NATO, with partners, in the UN and G7, and above all in Washington. In other words, visible defence has a value far beyond steel and must be seen as such. Sadly, the ‘refresh’ still reeks of strategically-illiterate Treasury economists who only ever see defence as a cost that must be limited. Even 3% of Britain’s GDP spent on defence would be barely enough given the strategic circumstances because of the way Britain spends on defence. Given events and decisions being made by the likes of China, Russia, Iran, North Korea and others 2.25% GDP on defence, even if it is enough, could only ever be enough if the British spent far, far better.
IR 2023 is thus a down-payment on alleviating the eternal short-term funding crisis from which Britain’s armed forces suffer, and AUKUS is clearly a down-payment towards a new intelligence-led Five Eyes-based alliance fit for the twenty-first century.
Moreover, the problem is that the first is little more than a fix and the second is a structurally strategic shift that will require both investment and delivery, neither of which Britain’s High Establishment is renowned for. Critically, AUKUS will require a sustained and joined-up security, defence and industrial policy. In other words, whilst AUKUS implies a profound change in Britain’s view of its role in the world and the utility of defence as a value rather than a cost, IR2023 seeks to limit the very defence investment central to the AUKUS vision. The result? Ever more tasks over ever greater distance for Britain’s dangerously hollowed-out and over-stretched armed forces. . Politics at the expense of strategy.
Too small with too much to do
The hard truth is that in relative terms the British armed forces are too small and too ill-equipped for the missions and tasks the British Government has signed up to in NATO let alone Global Britain. They have neither the quality nor the quantity. Particularly the case for the British Army which has become a leitmotif of the dead-end which for too long British defence policy has become parked in. It is precisely for that reason the British Army of today faces a very similar challenge to Lord Gort’s force back in 1940. For all its illustrious history the British Army of 2023 is an ‘anything but warfighting force’ compared with the forces that could soon be arrayed against it in the kind of war it might be called on to fight. Much the same can become said for the Royal Navy and the Royal Air Force.
Therefore, the essential inefficiency in British defence policy and investment is both caused by, and a consequence of, profound misalignment between the ends, ways and means of Britain’s security and defence. Such chronic defence-strategic inefficiency is magnified by a High Establishment seemingly incapable of generating the deep synergy across government that would be vital to turning relatively low defence investment into high effect. IR2023 is thus the latest iteration of a process that began back in 1998 which seeks to give the impression of ambition but in fact reveals Britain’s lack of it due to a woefully incoherent between national strategy, defence strategy and public finances. Smart defence it ain’t.
IR2023, like its forebears, is a thus another well-meaning attempt to square the eternal circle of Britain’s security and defence failure in the twenty-first century, but it is no more nor less than that. Rather, it is another one of those increasingly iterative ‘Microsoft’ security patch defence reviews that London routinely likes to download for political effect rather than strategic influence. IR2023 or Muddling Through 2023? As we Yorkshire folk are prone to say, IR2023 is a bit like putting a bay window on a brick s***house!
How much GDP does Britain spend on Defence?