The magic two per cent: defence by sound-bite?
As the General Election campaign draws to a close Endeavour Public Affairs looks back at how defence featured in the campaign. In this article EPA’s own Liam Purbrick focuses on the issue of the two per cent of GDP being spent on defence and asks whether this is a sensible approach to deciding how much a nation spends on its defence.
Liam is a defence and security expert. Prior to joining EPA he spent nine years in the army as an infantry officer, developing his knowledge of defence and international affairs while taking part in operations in Bosnia, Iraq, and Afghanistan. After spending his last military posting at the Permanent Joint Headquarters he worked in Whitehall as a civilian focusing on foreign affairs.
Surely all observers of UK general elections can agree on one thing: the campaign provides a vigorous mental workout thanks to grappling daily with unfeasibly large numbers. Just in the last few days we have heard the Conservatives promise an £8 billion increase on NHS spending per year by 2020; Lib Dems offer £5 billion a year extra for education, the Green Party to raise £25 billion a year from a wealth tax. At the same time, floating voters are lured with promises of specific, real outcomes: a reduction in NHS waiting times here, a renewed Right to Buy there. Yet in one sphere of policy debate the pivotal issue has been presented as a metric curiously unreal, both in terms of pounds to be spent and outcomes to be achieved. In recent months the national dialogue on defence has become synonymous with one figure: ‘two per cent’.
This oft quoted number is the ‘defence investment guideline’ introduced in 2006 by NATO under which member states agreed to commit a minimum of two per cent of their Gross Domestic Product (GDP) to defence budgets. Critically, this is described by NATO itself as, a ‘guideline principally served as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts,’ and has rarely been considered binding by member states. Although occasionally mentioned in the UK media since its inception, the guideline really registered in public consciousness after the Prime Minister used his address to the NATO Summit in Wales in September 2014 to urge other member states to hit the target. This was followed by uncomfortable suggestions in early 2015 that the UK itself was very likely to miss the goal in the financial year 2015/16. Thus, unusually, a percentage of GDP has become a familiar yardstick by which to judge a party’s commitment to a policy area. This is perhaps explained by the fact this is a guideline originating from a trans-national organisation rather than from the usual, essentially domestic, evolution of policy. Similarly, the other main instance in which the lay reader will meet a percentage of GDP figure is the 0.7 per cent of GDP pledged for overseas aid: a United Nations target first incorporated in a General Assembly resolution in 1970 and enshrined in UK law in the International Development Act 2015. It serves as a powerful demonstration of the results which can be achieved when a largely arbitrary, but internationally endorsed, target seeps into a state’s political consciousness.
When we attempt to understand what this target means, it is soon apparent that a percentage of GDP can be a crude, misleading, and potentially dangerous measure by which to gauge the utility of a nation’s defences. Firstly, unelaborated quotes of percentage of GDP figures can readily be confused with the (much lower and, arguably, more meaningful) ‘percentage of government expenditure’, risking giving an overly modest impression of the priority a government is attaching to a policy area. In the UK the Government actually spends six per cent of total government expenditure on defence. The leader of Plaid Cymru, Leanne Wood was therefore perhaps sensible to use the six per cent figure in the recent BBC debate. Secondly, as a country’s GDP changes over time clearly the cash value of a fixed percentage figure will change. An illuminating case in point is that at the height of the late Cold War re-armament, in 1985/6 the UK Defence budget ran to around £39 billion (at 2009 prices) and accounted for 5.1 per cent of GDP; in 2014 it had only reduced to around £36.5 billion in the same terms, yet represented the apparently modest 2.3 per cent of GDP, and therefore exercised some commentators as nearly violating the NATO target. The fascinating fact that our defence capability is almost undeniably vastly reduced from the mid-80s, while enjoying roughly similar real-term spending, leads to the separate and vexed concern of ‘defence inflation’: another huge issue in the national security debate which appears to have been drowned out by the simplified two per cent sound-bite.
Interestingly a very similar discussion on defence expenditure took place rather unexpectedly in the non-NATO Australia. In the lead-up to the 2013 Australian federal elections, the opposition coalition suggested that, if elected, it would spend two per cent on defence, with the suggestion that any lower level of spending would result in the nation’s defence budget being at its ‘lowest level since 1938’, with the presumable intention to imply that Australia would be entering a period of perilous global turmoil with inadequate security. As Andrew Carr and Peter J Dean of Australia’s Strategic and Defence Studies Centre have written in the journal Security Challenges, ‘GDP as a form of measurement, and specifically two per cent of GDP, became something of a “magic number”, replacing sensible debate about what Australia wants from its defence force.’ It is tempting to suggest that a similar situation has developed in UK politics in recent months. Perhaps this curious nature of the defence debate results from the fact that – unlike in many other areas of public policy – the vast majority of voters have not had even a passing personal experience of the defence establishment. While our lives so often weave daily between state provided schools, roads and hospitals, our armed forces are often an unknown and exotic realm. It is not surprising, nor automatically harmful, that politicians use a statistical short-hand to help explain a complex portfolio. But the GDP figure communicates at least two levels removed from any reality: it does not indicate an actual amount of money, let alone what capabilities – the people, the machines, the weapons, and the doctrine – such money might procure. As we look forwards to a Strategic Defence and Security Review in the early months of a new parliament, it might be a germane to consider whether the tools used in the all-important defence debate are helping or hindering our growing national tendency to illiteracy in military matters.
Published: Monday 04 May 2015
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The views expressed in this article are those of the author alone