Punching Above its Weight or Drowning in a Sea of Debt? The ‘Age of Austerity’ & British Influence

In March 2010, Daphne Park died at the age of 88.  As The Times noted in an obituary, she was ‘one of MI6’s most treasured intelligence officers’ whose ‘final job at MI6 was as Controller of the Western Hemisphere which included North America, South America and Canada’. (The Times, 26 March 2010).  After retiring from MI6, the British intelligence agency officially known as the Secret Intelligence Service, she emerged from the shadows and held a string of public posts, including a Conservative peerage in the House of Lords, the upper chamber of Parliament.

After her elevation to the Lords, Daphne Park was known as Baroness Park of Monmouth and in one of her last major speeches to the House of Lords she issued a timely and telling warning:

‘We … need to remember that our influence in the world depends on how both enemies and friends perceive our diplomatic and military power. It is in our power to ensure that they continue to respect us. It is also in the power of the present Government—I fear perhaps of future Governments as well—to be so obsessed by the need to save money that they forget that we have a part to play in the world and that respect is tied up with how we are seen to perform diplomatically and militarily. We cannot do the other things unless we have that respect.’ (Hansard, House of Lords Debates, 24 January 2008, Columns 363-365.)

All of which begs the obvious question.  Does the UK command the ‘respect’ necessary to maintain the ‘influence’ that it undoubtedly had at the time of the birth of Baroness Park in 1921?  This is an appropriate moment to address such a question, as the Labour Party has recently surrendered the keys to 10 Downing Street, after 13 years in which the government of the UK was presided over by two successive Labour Prime Ministers – Tony Blair (Prime Minister, 1997-2007) and Gordon Brown (the Labour Chancellor of the Exchequer from 1997 until 2007 and Mr Blair’s successor as PM: 2007-2010).

It is undeniable that during the period 1997-2010, the reputation and influence of the UK were tarnished by at least two developments of profound significance. One was the decision of the then Prime Minister, Mr Blair, to support United States President George W. Bush in relation to the invasion of Iraq in 2003, an action which was widely derided as being illegal and ill-planned. The other development was the depletion of the public finances of the UK, as a combined consequence of various factors including the global financial crisis, the recession in the UK, the multi-billion pound public bailout of several British banks, the expansion of a bloated public sector and a massive increase in public expenditure, particularly in the fields of ‘social protection’, health and education.

All of which has combined to produce ‘a general government deficit of £159.2 billion, the equivalent to 11.4 per cent of gross domestic product (GDP)’ and a general government debt of £950.4 billion, equivalent to 68.1 per cent of GDP.’  (‘UK government debt and deficit’, UK Office for National Statistics: www.statistics.gov.uk; accessed in May 2010).  In view of the astronomical sums involved, the UK is now facing a daunting challenge.  In the ominous words of David Laws MP, the then Chief Secretary to the Treasury (the Cabinet minister who is the deputy of the Chancellor of the Exchequer), as revealed in an interview with the Financial Times (21 May 2010), the country faces a choice between ‘the unpalatable and the disastrous.’ According to Mr Laws: ‘We are now moving from an age of plenty to an age of austerity in the public finances’ and, with a view to reducing the deficit, action is to be taken in ‘a really credible and decisive and aggressive way’.

In view of the above, the public finances of the UK have been variously described as being in a ‘catastrophic state’, a phrase used in 2009 by David Cameron MP, the then Leader of HM Opposition and the Prime Minister since 11 May 2010 (Hansard, House of Commons Debates, 29 June 2009, Column 24) and ‘in an utterly ruinous state’, a phrase used on 17 May 2010 by Mr Laws. (The Times, 18 May 2010).  Meanwhile, on 12 May 2010, Mervyn King, the Governor of the Bank of England, issued a stark warning:

‘The most important thing now is for the new government to deal with the challenge of the fiscal deficit. It is the single most pressing problem facing the United Kingdom; it will take a full parliament to deal with, and it is very important that measures are taken straight away to demonstrate the seriousness and the credibility of the commitment to dealing with that deficit.’ (Bank of England Quarterly Inflation Report Q & A, 12 May 2010, pp 3-4, official website of the Bank of England: http://www.bankofengland.co.uk/publications/inflationreport/conf120510.pdf)

The outlook is seemingly bleak. In the words of one commentator: ‘Now the pain, the whole pain, and almost nothing but the pain, is about to be laid out on the dissection table.’ (James Cusick, ‘The first cuts … not the deepest’, The Herald, 25 May 2010.)

Over the next few months and years, the UK is facing tax rises, spending reviews, cuts in public expenditure and years of austerity. Notwithstanding the ongoing deployment of British forces to Afghanistan and the evident external threats to the security of the UK and its allies, the defence budget will not be immune from scrutiny, let alone the axe.  Indeed, the new government is already committed to cutting the ‘running costs’ of the Ministry of Defence ‘by at least 25%’. (HMG, The Coalition: Our Programme for Government: Freedom, Fairness, Responsibility, London, May 2010, pp 15, 16 and 24.)

UK Defence Review 2010

Against this backdrop, the new government has launched a strategic defence review, the first since the previous one was completed in 1998. It is too early to say what will happen to defence expenditure and, indeed, the defence posture of the new government.  However, in relation to defence and the armed forces, the new government is fully aware of the profound problems it has inherited. As recently as 1 March 2010, the then Conservative Shadow Secretary of State for Defence, Dr Liam Fox MP, argued that:

‘The defence and security of the country is increasingly being run on a wing and a prayer, and as the money has failed to materialise for the unfunded projects, they have been delayed and delayed, with the taxpayer left to foot the bill and the military left to ponder their absent capabilities … [W]henever the election comes, the Government in office after will find themselves with a military that is overstretched, undermanned and in possession of worn-out equipment.’

On a broader note, Dr Fox added:

‘New Labour’s deluded belief that we can all live beyond our means indefinitely has produced an economic train crash whose effects will be felt for a generation. The enduring legacy of new Labour’s brand of socialism has been to saddle us with “cradle to grave” debt. When the Government leave office, they will not only have failed in their duty to support our armed forces properly in conflict, but the economic calamity they leave in their wake will make the task of rebuilding our security in a dangerous world all the more difficult.’ (Hansard, House of Commons Debates, 1st March 2010, Column 666-667.)

Dr Fox, the gentleman who uttered the above words as Shadow Defence Secretary, is now the holder of the office of Secretary of State for Defence.  As such, he has the unenviable task of dealing with the uncomfortable state of affairs left behind by his predecessors.

The UK: In the Latest Phase of its Gradual Decline?

If seen in historical context, we may be witnessing the latest phase in the long decline of British power, particularly if one buys into the thesis advanced by Corelli Barnett in The Audit of War: The Illusion and Reality of Britain as a Great Nation, which was first published in 1986. In this book, Barnett ‘locates the causes of the British eclipse [following the Second World War] not in the events and policies of the post-war era, but in the British record during the war itself – for total war submits nations to a ruthless audit of resources, talents and failings: human social, cultural, political and technological no less than military.’ Barnett explains that in the immediate post-1945 period, ‘the audit of war remained hidden by the outward façade of victory, the propaganda about the scale of the national effort, and the deceptive inflow of American aid under Lend-lease.’  Barnett goes on to conclude that:

‘As that descent took its course the illusions and dreams of 1945 would fade one by one – the imperial and Commonwealth role, the world-power role, British industrial genius, and, at the last, New Jerusalem itself, a dream turned to a dark reality of a segregated, subliterate, unskilled, unhealthy and institutionalized proletariat hanging on the nipple of state maternalism.’ (Corelli Barnett, The Audit of War: The Illusion and Reality of Britain as a Great Nation, Macmillan, Basingstoke, 1986, Pan  Books edition, 2001, pages xi-xii and 304.)

All the signs are that in at least some respects the ‘dark reality’, as painted by Barnett, is more visible today, bearing in mind that as many as eight million or so people in the United Kingdom are economically inactive with many of them dependent upon the state and public funds according to the Office for National Statistics.  As events unfold and the axe begins to fall, the decline may accelerate still further.

All of which raises the question posed at the outset of this paper. As the new government prepares for the future, is the UK punching above its weight (to quote the memorable phrase coined by Lord Hurd of Westwell who, as Douglas Hurd, served as Foreign Secretary, 1989-95) or is the country drowning in a sea of debt?

On the one hand, the UK retains a global presence, a global role and a pillar of the European and global security systems – as one of five permanent members of the UN Security Council, as one of the Group of Eight (G8), as a founding member of NATO, as a leading light in the European Union and as a significant military power with an arsenal of nuclear weapons, twelve overseas territories and a global military presence in various military bases and theatres of conflict, notably Afghanistan. In short, the British maintain many of the trappings of power and, they continue to ‘punch above their weight’ in international affairs.

On the other hand, historians may look back on the 1997-2010 Labour government as one which engineered a tipping point in the history – or, at the very least, the latest stage in the long, slow decline – of the UK. What is clear is that under thirteen years of Labour government, the global influence of the UK was impaired by virtue of Iraq, the ill-treatment of the armed forces and the ‘catastrophe’ wrought upon the public finances.  The long-term effects of the ‘catastrophe’ could be profound.  According to PM Cameron, in a speech given on 7 June 2010, the national debt ‘is set to nearly double, to £1.4 trillion’, within the next five years: ‘that is some £22,000 for every man, woman and child in the country …’ Based on the calculations of the last government, in five years’ time the interest we are paying on our debt is predicted to be around £70 billion. It follows that the new government is having to make ‘momentous’ decisions with ‘enormous implications’. According to Mr Cameron: ‘How we deal with these things will affect our economy, our society – indeed our whole way of life. The decisions we make will affect every single person in our country. And the effects of those decisions will stay with us for years, perhaps decades, to come.’ (‘Prime Minister’s Speech on the economy’, 7 June 2010, http://www.number10.gov.uk/news/speeches-and-transcripts/2010/06/prime-ministers-speech-on-the-economy-51435)

As the future unfolds, British influence on the world stage could be further on the wane, notwithstanding the new strategic defence review. For this reason, perhaps the last word may be left to the late Baroness Park of Monmouth:

‘There is no point in having endless strategic reviews and explanatory essays and expecting the services to plan for them, and then adding more tasks, all of which draw on limited strategic and technical resources that are not augmented … Least of all does it make sense to do serious damage to our Armed Forces through overstretch, threats to training and, above all, a failure to give at least as much importance and attention to the rights of the men and women in the services as the NHS and education … The services are unique; they are not just another supermarket chain or quango.’ (Hansard, House of Lords Debates, 17th January 2005, Columns 569-571.)

© Klearchos A. Kyriakides, St Albans, 2010.  Klearchos A. Kyriakides is a Senior Lecturer and a non-practising solicitor at the School of Law of the University of Hertfordshire (email: [email protected] ).  This paper is based on a paper delivered at the conference on The Future Architecture of European & Global Security Architecture organised by the International Security Forum in the Republic of Cyprus, on 29th May 2010.





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Lecture in British History and Literature, Ionian University
written by Dr. William Mallinson, July 01, 2010 

This is a good article.Britain’s imperial and economic decline (both inextricably interwoven) was on the cards well before the last world war, but gathered pace after the war.The Suez crisis proved that Britain could no longer contemplate going it alone, so she chose the US, and has been in her lap increasingly ever since, although Edward Heath tried to reduce Britain’s dependence. One of the last nails in the coffin of British independence was the invasion of Cyprus, when Britain tried to give up its bases, but was told by the US to keep them.Despite Britain’s dreadful financial position, the US will currently be twisting Britain’s arn, so that the British taxpayer pays about eighty billion pounds to American sharehoders to update its otiose nuclear Trident missile system, and Britain can feel powerful, even though bshe is not even allowed to fire those missiles without US permission.Britain’s strongest card viv-a-vis the US is actually its positionn in the EU as a US agent, where it does its best to pursue the US agenda of strengthening NATO tothe detriment of the CFSP.Subtle hints to the US that it would like a little more independence to prevent it going more up a Franco-German path could eli