British Prime Minister David Cameron's coalition government continues to push forward with a program of spending cuts almost unprecedented in its audacity. To be sure, it is an audacity born of necessity. The Sceptered Isle is in dire budgetary straits, with a deficit at 12 percent of GDP and national debt at 56 percent of GDP. In a fiscal policy twist on Samuel Johnson's aphorism, nothing "concentrates the mind wonderfully" like the prospect of a national credit rating downgrade and punishment from the bond markets. Britain's massive increases in domestic spending over the past decade and a half were possible only as long as tax revenues from a booming financial sector were able to fund it. With the economic crisis and the collapse in private-sector growth, a new fiscal reality has set in.
Against this backdrop, the Cameron government is conducting its Comprehensive Spending Review across all government budgets, as well as the Strategic Defense and Security Review (SDSR) of the national security accounts. Beyond the green eyeshades of these reviews, on a deeper level Britain as a nation is undergoing a traumatic yet healthy debate about the proper size and scope of government -- not only on how much or little government should spend but also on what government should and should not do. In the domestic sphere this is exemplified by Cameron's vague-but-appealing notion of a "Big Society" where citizens and communities take on larger roles in self-governance, and more particularly by initiatives such as Work and Pensions Secretary Iain Duncan Smith's ambitious welfare-to-work reforms.
In the realm of national security, the debate is about whether Britain should continue to be a global power or should downgrade itself to regional power status. Here the divides are not between small and big government advocates, but between different visions for the Britain's role in the world. Even limited government conservatives believe that a fundamental responsibility of the state is providing for national defense, which is beyond the competence or jurisdiction of the private sector. Only a strong military can defend the nation against the "Queen's enemies." Likewise with diplomacy; only the Foreign Office can represent the nation in affairs of state and advance its values and interests abroad.
Set against these imperatives, Britain's government budget allocations inherited by the Cameron government are revealing. Domestic spending on pensions is 8 percent of GDP, healthcare another 8 percent of GDP, and welfare 4 percent of GDP: a total of 20 percent of GDP goes to maintaining the welfare state. In contrast, the defense budget of £37 billion is about 2.5 percent of GDP, or one-eighth of the welfare state expenditures. The Foreign Office budget of £2 billion barely even registers as a percentage of GDP, and will be pared back further. The overseas development aid budget of over £7 billion has been "ring-fenced" from any cuts, as Cameron promised in the campaign.
The cabinet ministers responsible for Britain's national security posture seem to be trying to assert a global role. Foreign Minister William Hague has rhetorically rejected Britain's "strategic shrinkage," reinforced by outreach to potential new partners such as India and Brazil. Last week he emphasized that this means not shrinking from the projection of values either, with a strong defense of promoting democracy and human rights. International Development Minister Andrew Mitchell has been dividing his time between globe-trotting abroad to advance DFID's assistance programs, and implementing ambitious reforms in the DFID office in London. Defense Minister Liam Fox has gamely played the limited hand he was dealt requiring further budget cuts of 10-20 percent. He is seeking to fend off more draconian cuts in the military budget while protecting big-ticket items such as two new aircraft carriers or the needed upgrade of the four Trident submarines that comprise Britain's nuclear deterrent. The latter may be a red-line; Fox has (reportedly) threatened to resign if the Trident upgrade is deferred as several LibDem coalition partners are advocating. Among the services, recent indications are that the Royal Navy and Air Force will bear the brunt of the budget pain ("pain" for the Navy being defined as -- no, I am not making this up -- possibly sharing aircraft carriers with France), at least protecting the resource-strapped Army from further cuts in the midst of its troubled Afghanistan mission.
Conversations with British military and civilian defense officials reveal a frequent sentiment that it has not been a good decade. Many of them privately describe their army's campaign in southern Iraq as a tactical defeat, and voice ongoing worry over their performance in Afghanistan. Much of this stems from the force being under-equipped in theater and under-resourced for training at home. As Ted Bromund has pointed out, these ambitious missions have been carried out in the midst of enervating defense cuts that go back almost a decade and a half. Such a trend is not easily arrested, or reversed.
More than just a matter of pounds and pence, the fundamental strategic question is whether the UK still intends to be capable of global power projection. Doing so is tremendously expensive, and yet as overall British budget allocations above show, the resources are available if accompanied by the political will. In this case, the political will to curtail the welfare state, adequately fund the Foreign and Defense Ministries, and move towards an enterprise-oriented economy focused more on growth than redistribution.
What does this mean for the United States? Britain remains America's strongest and most important ally, yet any further retrenchment in Britain's strategic capabilities and posture will mean further strains on the alliance. Not just in terms of Britain's diminished capacity for force projection abroad, but also in the negative signal it will send to other NATO member states who are also wrestling with their own anemic defense budgets. Yet a robust British foreign and defense budget can be a force multiplier. In a way similar to Japan (as Dan Twining describes below), Britain may no longer be at its zenith but it is still a formidable nation. As long as the British can play a global role, they can be a reliable partner with -- and even influence -- the United States.
Here is where public attitudes are intriguing. Last week the German Marshall Fund released its annual, and indispensable, Transatlantic Trends survey of public opinion in the United States and Europe. One of the most revealing questions asked is whether under some circumstances war is necessary to obtain justice. 77 percent of Americans said yes, in contrast to just 27 percent of EU citizens. The only European nation where a majority answered in the affirmative is Britain, at 61 percent. While this may show a shared U.S.-British worldview, on a specific looming concern the attitudes diverge. On Iran's nuclear weapons program, when asked if all non-military options are exhausted would they support military action, 64 percent of Americans said yes, but only 32 percent of Brits agreed. (Surprisingly, 58 percent of French respondents said yes). In the unfortunate case that the current sanctions regime does not succeed in curtailing Iran's nuclear ambitions, all manner of tests will loom, including of the U.S.-British relationship.
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