Dr. Stuart Parkinson examines UK government spending presented by the Chancellor, Jeremy Hunt, in his Spring Budget 2023

This short briefing examines UK government spending presented by the Chancellor of the Exchequer, Jeremy Hunt, in his Spring Budget 2023 (SB-23).1i

Summary

The detailed figures for SB-23 show that UK military spending over the period 2021-25 has been boosted by £7.1 billion when compared with budget figures announced in last autumn. This includes an extra £1.5bn for the financial year 2022-23, and an extra £5.6bn for the two-year period 2023-25. This increase is a 3.7% uplift, which is higher than for any other government department, including health and social care, education, levelling up and communities, environment and agriculture, transport, and foreign affairs and international development. The £7.1bn rise is also significantly higher than the headline figure of £5bn stated as part of the ‘Integrated Review Refresh’ (IRR) – an update of security and foreign policies launched to coincide with the budget. The Chancellor also announced a further £6bn increase spread over the three years 2025-28 – assuming the government wins the next general election. Hence the total increase in military spending announced in SB-23 is £13.1bn – not £11bn as widely reported.

The military spending boost comes on the back of a huge rise announced in 2020 at the height of the COVID-19 pandemic, and further above-inflation increases in the interim period. The latest rationale behind these rises is provided in the IRR, which entrenches a more confrontational approach to global issues, especially in the wake of the war in Ukraine. The increased emphasis on military prowess comes, in particular, at the expense of spending on international development – which is again cut. There will also be little solace for striking workers in the health, education and other public sectors as an opportunity to significantly increase these budgets has been missed. Furthermore, efforts to tackle the climate crisis have been further undermined as no new funding for home energy conservation or renewable energy was announced – with preference given to nuclear and fossil fuel technologies. The increased focus on nuclear coincides with its greater emphasis in the military sector – especially as part of the new AUKUS submarine deal – which clearly indicates that civilian energy policy is being shaped by a wider agenda.

Key Points

The latest figures on UK government spending2 show the following on military issues:

  • Core military spending3 rose from £45.9bn in 2021/22 to £53.1bn in 2022/23, an increase of £7.2bn or 15.7%.4 This rate of increase is markedly higher than inflation for consumers.
  • The projected total for core military spending over four years (2021/22 to 2024/25) has risen from £194.5bn to £201.6bn since the Autumn Statement (AS-22) – an increase of £7.1bn or 3.7%. This percentage rise is higher than that for any other government department (see some comparisons below). The figure of £7.1bn is also higher than the headline figure of £5bn given in the IRR, the main text of SB-23, and in the Chancellor’s parliamentary statement. This is because the headline figure does not include the extra increase in 2022/23 and rounds down the total rise for the two years, 2023/24 and 2024/25.
  • The projected annual totals for 2023/24 and 2024/25 (have increased) but remain 3-4% lower than that for 2022/23. This means that core military spending is projected to fall significantly over the next two years – especially once inflation is taken into account – although extra funding may be found in future budgets.
  • A further £6bn increase spread over the three years 2025-28 is pledged – assuming the government wins the next general election.5
  • The government is committed to spending a minimum of 2.25% of GDP on the military by 2025 – with a “longer term” aim to increase this percentage to 2.5%.6 This is higher than the NATO target of 2.0% GDP.
  • These spending figures do not include military assistance to Ukraine – which was £2.3bn in 2022 – and is expected to be a similar amount in 2023.7
  • The rationale for the increases in military spending are given in the ‘Integrated Review Refresh’ (IRR) – an update of security and foreign policies launched to coincide with the budget.8 The spending increase in the two-year period 2023-25 is earmarked for the replenishment of weapons stocks depleted by military assistance to Ukraine, and for spending on military nuclear technologies (see below).

Table 1. Core military spending – comparison between figures in Spring Budget 2023 (SB-23) and Autumn Statement 2022 (AS-22)

Core Military Spending in £bn 2021-22 2022-23 2023-24 2024-25 Total
Spring Budget 2023 45.9 53.1 50.9 51.7 201.6
Autumn Statement 2022 45.9 51.6 48.4 48.6 194.5
Difference 0.0 +1.5 +2.5 +3.1 +7.1

Some comparisons with other areas of government spending:

  • In the Spring Statement 2022 (SS-22), core military spending for the year 2022/23 was projected to be 4.3 times the size of the budget for the Foreign, Commonwealth and Development Office (FCDO).9 This has now risen to 5.5 times – a huge increase in one year. This figure is projected to fall over the next two years – but this may change depending on future Budget Statements.
  • A specific comparison between military spending and total spending on official development assistance (ODA) – also known as overseas aid – is not yet available due to the limited detail provided in SB-23. However, the FCDO budget makes up the bulk of ODA, so this is a good proxy indicator. It is also worth noting that SB-23 does not even mention the issue of ODA.
  • In SS-22, core military spending for the year 2022/23 was projected to be 7.3 times the budget of the Dept of Environment, Food and Rural Affairs (Defra).10 This has now risen to 8.4 – another very large increase.
  • A comparison between military spending and total public spending on energy and climate change is once again available thanks to the recent creation of the Department for Energy Security and Net Zero (DESNZ). Core military spending for 2022/23 was 8.7 times the budget for DESNZ. This is projected to fall over the next two years so that, over the three-year period 2022-25, the ratio is expected to be around 7. This is similar to our estimate from 2021,11 following the launch of the government’s Net Zero Strategy.
  • The four-year budget for the Department of Health and Social Care – from 2021 to 2025 – has been increased by 0.7% compared with figure in AS-22. The increase for the Department for Education was 0.5%, and for the Department for Transport, it was 1.5%. The equivalent budget for the Department for Levelling Up, Housing and Communities fell by 1.3%. Defra’s budget fell by 0.4%, and the FCDO’s fell by 2.8%.

The issue of climate spending is worth further comment, given the urgent need – both nationally and internationally – to rapidly reduce carbon emissions to reach the Paris Climate Agreement targets. In particular, the target to hold global temperature rise below 1.5C is quickly moving out of reach because of a lack of ambition of industrialised nations including the UK. The resulting impacts – both globally and on the UK – will be devastating. Hence, the government’s recent approval of major new fossil fuel extraction projects covering gas, oil and coal – driven by the British Energy Security Strategy12 – has been especially damaging. SB-23 was a missed opportunity to change direction. Disturbingly, for example, it did not seek to strengthen the windfall tax on the huge profits of the oil and gas industry. Neither did it offer extra support for home energy conservation and renewable energy technologies – despite their proven track record for reducing emissions and costs. Instead, the government focused on nuclear power – planned to be officially re-classified as ‘sustainable energy’ along with renewable technologies13 – and fossil fuel-based technologies, such as carbon capture and storage, despite their poor track record. This counter-intuitive approach has an explanation in the IRR. It strongly links the development of military and civilian nuclear industries.14 The agreement of the new AUKUS dea15 – which is planned to use British and US manufacturing facilities to help construct a new fleet of nuclear-powered submarines for the Australian military – is especially important in this context.

Dr Stuart Parkinson is Co-chair of GCOMS-UK and Executive Director of Scientists for Global Responsibility (SGR).

References:

Source: Global Campaign on Military Spending UK

21 Mar 2023 • by Stuart Parkinson

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