Increasing defence budget will require tough trade-offs

Good morning. An awful lot happened yesterday — Keir Starmer announced plans for the most sustained increase in UK defence spending since the cold war, Kemi Badenoch gave a speech about foreign policy, and Amanda Pritchard resigned as head of NHS England.

A lot of readers got in touch with questions about these topics: my view, which may age spectacularly badly, is that I want to talk more widely to people in and around the NHS before tackling the matter, and that in any case, there is going to be a bit of a gap when my views on what the government is doing on defence will be borne out by events. As such, I plan to tackle the latter later this week, and the first two in today’s email. More on that below.

Balancing act

Keir Starmer has announced that the UK will spend 2.5 per cent of GDP on defence by 2027, paid for by cuts in the UK’s aid budget, and that the UK will increase aid spending year on year into the 2030s. This is in many ways welcome. But we should be clear that, in and of itself, we are talking about an announcement that means the UK’s defence capacity will not degrade further, rather than something that allows the UK to replace US assets and support in Europe.

However, whatever the UK does by cutting the Official Development Assistance spend will surely be additional to whatever the government ends up doing with respect to the mooted new Europe-wide funding vehicle for increasing defence spending. I will revisit this once we see what emerges from the talks over the next few days, but taken together, this looks like a plan that will meaningfully and usefully increase what the UK spends on defence.

That being said, while you can do all that — stick within the government’s fiscal rules and avoid breaking the government’s promises on tax — at risk of sounding like a stuck record, I am going to point out that given the UK’s problems with persistent inflation and sluggish-to-stagnant growth, it’s not obvious that the country is best served by repurposing aid spending and increasing borrowing via a European vehicle. The government’s focus groups, I’m sure, continue to emphasise the importance of keeping promises on the NHS and on tax. Indeed, per YouGov, while a majority support increasing defence spending, they do not support it if it comes at the cost of higher taxes or less spending at home.

Focus groups can tell you an awful lot of things, but the idea that they can tell you whether or not voters will thank you if, instead of using tax rises in an intentional way, you decide to have more inflationary pressure and to wait longer to bring the UK’s day-to-day deficit down is, I think, mad. Voters hate inflation and they hate high interest rates. There are lots of ways to bring those down and they all have trade-offs. But “increasing defence spending and leaving taxes where they are” is a route to do neither.

As for Kemi Badenoch’s speech, frankly I don’t have much to say about it other than it was exceptionally vapid. This was a speech in which she misquoted Irving Kristol as saying a “conservative is a liberal mugged by reality”. Kristol said “neoconservative”, not conservative. They are not the same thing. And that same level of lazy disengagement from what is the most important challenge facing the UK continued throughout the speech.

Badenoch and Starmer share an affliction. Badenoch visibly is not that interested in geopolitics and would much rather talk about shrinking the state (while, it must be said, opposing even the most low hanging of cuts, an ambiguity Rob Hutton brings out well in his sketch over at the Critic). The Labour government meanwhile shows few signs of being willing to refocus to face the challenges that have been thrust upon it in office, rather than the ones it would like to be facing.

Now try this

I saw The Monkey, and frankly I was disappointed: it has a bunch of lovely visual gags but the script is neither funny nor scary. Stay home and watch Bodies Bodies Bodies instead. However, I did have a lovely taco and margarita at Taco Bros, the wonderful food truck by the cinema, which is run by a delightful husband-and-wife team. So, you know, I feel I came out a net winner overall.

Top stories today

• ‘Fish disco’ deterrent | Energy company EDF has been urged by campaigners to stick with plans to install underwater loudspeakers to deter fish in the Bristol Channel, as it grapples with further delays to construction of its Hinkley Point C nuclear reactor.

• Machine-learning? | More than nine out of 10 UK undergraduate students are using artificial intelligence to help them complete their studies, according to a survey published by the Higher Education Policy Institute think-tank, raising questions about how universities assess their work.

• ‘Tighter Whitehall control’ | NHS England chief executive Amanda Pritchard’s shock resignation has brought Wes Streeting’s plans for the health service into sharp focus. The health secretary unveiled a dramatic ‘plan for change’ on Tuesday, a part of which includes tighter Whitehall control.