The fiscal year ends on 5 April in the UK. The Chancellor of the Exchequer announces the Budget once a year in the House of Commons. “Budget” originates from the old French word “bougette” which means little bag. The Budget announcement customarily takes place by bringing the statement of the government’s financial policy in a red leather bag known as the Budget Box to Parliament. In effect, what the Chancellor brings to the House of Commons is what 10 Downing Street has planned for the following year. During their respective tenure, different prime ministers highlight the details of the budget for the year or years ahead. Boris Johnson, the current prime minister of the United Kingdom, announced the end of the defence austerity policy in 2020 and a significant increase was allocated to defence spending. The announcement comes at a time when the UK is facing several financial challenges after the pandemic hit the country as in the rest of the world.
Based on official data, there is a gap between government revenue and expenditure each year, resulting in a budget deficit and adding to government debt. The UK deficit has been a recurring story every year since 1947, starting with a GDP of 3% at the time. The budget deficit occurs almost every year. During the financial crisis which took place in 2008, budget deficit and government debt rose sharply. Downing Street introduced austerity measures over the last few years to reduce spending and minimize the gap between revenue and expenditure. Boris Johnson took the oath of office in July 2018 when the budget deficit was £56.2 billion, while in the following year this figure dropped to £41.5 billion. In 2020, Boris Johnson’s government experienced another deficit which will carry on into the coming year. Based on official data, the government deficit will be £62.3 billion in the financial year ending in 2020.
Is Covid-19 affected in the defence budget?
In 2020, the UK, like most countries worldwide, underwent economic pressures during the Covid-19 pandemic. The government’s quarterly borrowing hit a record high in 2020 due to the lockdown and National Health Service (NHS) expenses. But despite increasing government expenditure, Boris Johnson announced a four-year £16.5 billion rise in defence spending. It is going to be the biggest rise in the last three decades; in other words, it is the largest defence increase since the end of the Cold War. The prime minister called this surge a “once in a generation modernisation” of the Britain Armed Forces and said it is the end of the austerity era for them. According to formal information, devolved governments in the UK will spend £908.1 billion in 2021 and the central government spending will amount to £53.3 billion a year on defence; the recent increase will be added to the total spending. With Brexit taking place shortly and Britain leaving the European single market and customs union, Boris Johnson is planning on more spending for the armed forces while it is predictable that the UK government debt will increase further in the coming years.
Nevertheless, in support of his defence budget rise, the prime minister claimed that this will create 40,000 jobs and strengthen the UK position as the largest military defence financier in Europe and the second biggest spender in NATO after the US. He stated that investment in defence will focus on revolutionising warfare, such as artificial intelligence and sensor-laden hardware. Although many defence budget cheerers complained about the austerity years for the armed forces, the idea of low spending on the military over the last years was just a myth. Based on data shared by SIPRI, the UK accounted for one of the biggest global military spending over the past decade. It is not only ahead of European countries, except for France which is on the same level, it also remains one of the few countries in NATO which continues to spend more than 2% of its GDP on defence. According to comparative data, the UK is the world’s third largest spender on defence after the US and China.
Opponents to the rise in the defence budget cite other public priorities: public health, pensioners, public education, child care and charities, plus the most recent financial demands related to the pandemic; they believe that if the government can find extra money to spend more on the military, it is possible to find the money for the social crises suffering from cuts. Opponents to such a defence surge underline that the government should take more responsibility for the next generation and insist on a proper strategy for social and health investment to help families suffering from and struggling with financial issues, help food banks and provide free school meals.
Boris Johnson and the defence budget dilemma
Boris Johnson increased the military budget, even though it is an issue of debate for local governments, including Scotland and Northern Ireland. Recently, the Scottish finance secretary told Members of the Scottish Parliament that the Conservative Cabinet, without a reason, has delayed the Scottish budget and added that if their Budget is held back there will be “profound consequences” for the UK government. Also, Northern Ireland has complained that it is over half a billion pounds short in the Budget. The Northern Ireland Assembly finance minister has said that the Budget suggested by the UK Chancellor does not meet the funding requirements the nation needs in order to make first class public services available.
At a time when the world is struggling with the Covid-19 pandemic and nearly all governments are suffering from a lack of funds to tackle the problem, provide health care and compensate businesses for their losses, Boris Johnson, in a surprise announcement, increased the defence budget for the next four years. The Conservative Cabinet’s decision has its supporters and opponents; the former puts great emphasis on military might, but the latter seeks ways to tackle the country’s internal problems. Britain has been struggling with Brexit’s unpredicted expenses, devolution budget complaints and constant budget deficits; now, the country faces extra pressures to deal with the pandemic. Based on official data, total UK arms sales make up less than 2% of the country’s exports. Although the government justifies its defence spending to the British people by citing more job opportunities and more trade and prosperity, real data shows that the impact of defence economics is exaggerated. If the UK government reallocates the defence industry resources, it can produce many more jobs in other fields which will result in a safer world.
