New Times,
New Thinking.

  1. The Staggers
20 February 2023

Why is there always a magic money tree for defence?

The case for boosting public sector pay is stronger than that for gifting more funding to the wasteful Ministry of Defence.

By Simon Fletcher

Ben Wallace likes to talk tough on public sector pay. “We’re not going back to the 1970s where the trade union barons thought that they ran the government,” the Defence Secretary declared last year. Paul Nowak, general secretary of the Trades Union Congress, had called for ministers to negotiate. “There’s no magic wand here to come up with money that the country doesn’t have,” was Wallace’s response.

Except that he does have a magic wand – if it is for defence spending. Wallace is currently publicly negotiating with the Chancellor through the pages of national newspapers in a bid to secure an extra £8bn-£10bn for his department in next month’s Budget. He is also reported to have pushed for a real-terms increase in defence spending over the next spending review period beyond 2025. Wallace has told the BBC that he would “make the case to the Treasury that I will need some money to insulate myself”.

Millions of people would like more income to insulate themselves from the living standards crisis, but Wallace is not their ally. All of this amounts to fiscal exceptionalism – austerity for the many, profligacy for the few. Wallace is one of those who has campaigned to entrench a steep rise in defence spending: last year he indicated he was prepared to resign if Liz Truss did not honour her Conservative leadership campaign pledge to spend 3 per cent of GDP on defence by 2030 – an increase from 2 per cent. 

Defence and security are major undertakings but a compelling case can be made for many public services. A vast amount is allocated to military and defence in the Nato alliance; the US may account for just over 4 per cent of the world’s population but its defence budget represents 40 per cent of global military expenditure. Within Nato, UK defence spending is at extremely high levels, both in total and in comparison with other states. Figures for 2021 put the total UK budget at £45bn a year, making it the fourth highest spending country. In response to Wallace’s demands, Treasury briefings indicate concern that existing defence projects are overrunning by billions of pounds.

The Ministry of Defence is indeed addressing the pressures of the war in Ukraine and inflation. But on defence, Britain is already a high spender. It is incredible that people sitting on this level of expenditure are unwilling or unable to argue that they can defend the country.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

Far stronger than the case for defence spending is the case for resolving the wages crisis. Real household disposable income per person is set to fall by 7 per cent over the next two years, the biggest reduction on the the Office for Budget Responsibility’s records. Collapsing pay is leading to a workforce crisis in key areas such as schools and the NHS as recruitment and retention both plummet. Across society people on middle and low earnings alike are seeing their spending power eroded – something that will lead to job losses and wage cuts elsewhere. For these reasons, an immediate economic and moral priority should be to raise the proportion of the economy going into incomes.

The public is very capable of seeing through an argument that claims there is no more money for NHS workers or teachers, but that there is money for military expenditure. Economists have often discussed the “guns or butter” tensions faced by economies: the choice between defence spending and the requirements of the wider population. That may be summed up at present as a question of wages, not weapons.

Content from our partners
"Heat or eat": how to help millions in fuel poverty
We need an urgent review of UK pensions
The future of private credit

Topics in this article : , , , ,