Losing the Global Race

Alphen, Netherlands. 23 June.  British Chancellor of the Exchequer (Finance Minister) George Osborne said  that Britain must win “the global race”, which is probably a political metaphor for reducing deficit spending and increasing productivity.  At the crux of his efforts to claw back a further £11.5bn of savings have been further cuts to the British armed forces.  This coming Wednesday he will confirm more defence civilians will be sacked and contracts with defence industry will be renegotiated, although sensibly more money will be invested in cyber-defence.  So, why is defence being cut further and where does the 26 June Comprehensive Spending Review (CSR) – a cut on top of all the other cuts – leave the British armed forces?

Speaking openly about the impact of more cuts the Head of the British Army Sir Peter Wall said, “We have got to the point in a number of parts in our set-up where we can’t go any further without seriously damaging our professional competence and our chances of success in the battlefields of the future”.  When serving generals speak out in public there is usually something amiss.   

On the face of it these cuts are designed to further reduce British public sector borrowing which has been stuck at around £119bn ($183bn) or 8% of the economy for the past two years.  In fact, the savings Osborne seeks for 2015-16 are driven by three political factors; debt psychosis, the prime minister’s political peccadilloes and the need for a political ‘war chest’ so that Cameron can artificially stimulate the British economy prior to the 2015 general election. 

Critically, the funding of several departments of state are to be ‘ring-fenced’ (protected) which means that some departments of state (including defence) will face deeper cuts than they ideally should.  The effect of this ‘ring-fencing’ not only undermines national security and renders the CSR utterly unbalanced but leads to downright perversity. 

This morning Labour luvvie Dame Helena Kennedy said that the government must not cut aid to the world's poor people.  If only British aid went to the world’s poor people.  For example, Britain is funding a project at the University of Tilburg here at the Netherlands entitled “Innovation and Growth” which seeks to make African companies more innovative.  Some €4m ($5.2m) of British taxpayer’s money is being given to a Dutch university for a project in which there is neither British university nor institutional involvement nor indeed any direct African involvement.  Nor is this the first such Tilburg project the British have funded.  In other words, ‘ring-fencing’ is a political metaphor for waste of British money and nothing is done to stop it.

This brings me to the hard choices Britain’s armed forces will soon have to confront as a consequence of these cuts.  Britain either retains a rump conventional force that can be sent ever so slightly further than Brighton for a day or two, or invests in a dedicated nuclear deterrent that hopefully will do nothing...ever.  The British defence budget can no longer afford both.    

This political assault on the nuclear deterrent is further compounded by the way it is to be funded.  The Treasury (Finance Ministry) now insists the deterrent be funded by the defence budget whereas in the past it was paid for out of the national contingency fund.  The friction this shift generates will become all too apparent in 2015-16 when costs kick-in for the future deterrent, the successor to the UK’s Trident sea-based nuclear deterrent, which will cost an estimated £15-20bn ($23bn-$31bn) (and of course being Britain will in fact cost far higher). 

Therefore, London may have to think laterally (heaven forbid!).  That could mean one of two things.  Whilst there would be strategic and operational disadvantages the new Astute-class nuclear attack submarines could be fitted to carry supersonic nuclear-tipped cruise missiles.  The other alternative is stark; respond to Obama's Berlin speech by making virtue out of necessity and announce that Britain will set an example to the world and disarm.  That is where the logic of these cuts is leading Britain and, of course, the Liberal Eurocrats would love that. 

The 2010 Strategic Security and Defence Review (SDSR) was meant to be the definitive and defining major cut to to the British armed forces.  The simple truth is that the 2010 SDSR was an utterly un-strategic retrenchment and is still cutting a deep trench through Britain’s demoralised armed forces.  These further cuts will not only leave an already hollowed-out force hollow to its core they will have a negative impact way beyond the ‘value’ of any savings.  Critically, Britain’s already waning influence in Washington, NATO and the EU will again nose dive. 

Britain is losing the global race because the very people who talk about winning it cannot think strategically.

Julian Lindley-French