Is the UK's defence budget exceptional?

Published: 15th Sep 2010

MPs and defence experts have criticised the speed with which the Government's defence review is being conducted, expressing concern that a rushed review could harm Britain's military capabilities.

The strategic defence and security review is reportedly considering cuts in expenditure of around 15-20 per cent.

But it claims that this is achievable without damaging front line effectiveness.

The debate has prompted the question of whether or not the UK's military expenditure is unusually high. 

The claim

On the Today Program this morning, John Humphries put it to the Evening Standard's Robert Fox that the UK "spends more money on defence than any other country in the world apart from the US and China."

But Mr Fox countered that this was "a bit of a Today Program exaggeration", and that the defence budgets for certain countries, including India and Turkey, were "very difficult to calculate."

According to the International Monetary Fund, the UK has the world's 7th largest GDP. Does it really also have the third largest defence budget? 

Analysis

It seems likely that Mr Humphries' statistic came from the Stockholm International Peace Research Institute (SIPRI), the source used by the Ministry of Defenceitself to calculate comparative international defence spends.

SIPRI's latest figures put the UK's 2009 military expenditure at £37.7 billion. In their international comparisons, SIPRI does indeed put the UK third in terms of military expenditure.

However, each country's figures are released in native currencies at various points depending on the domestic financial year. To make these directly comparable, SIPRI have used a constant of 2008 USD.

Taking changes in exchange rates into account actually puts France's defence budget slightly ahead of the UK's, making the UK's defence spending the fourth largest rather than the third.

But are the SIPRI figures the best for judging the international context of Britain's arms spending, given that they provide a nominal figure that does not account for the size of the UK economy?

When considered as a proportion of GDP, Britain ranks much lower, placing 63rd in international comparisons according to the CIA World Factbook.

Furthermore the CIA do not release breakdowns of gross spending precisely because a country's expenditure is difficult to discover and to calculate, as noted by Mr Fox.

But the CIA's estimates are riddled with complexities, since their compilations are an inheritance of Cold War objectives to identify the military spending of the USSR and its allies, and to adjust US policy accordingly.

Conclusion

The most respected current stats on gross military expenditure put the UK third or fourth in the world depending on the exchange rate used, so the claim that the UK has the world's third largest defence budget is far from baseless. Whether or not this makes the UK an unusually big military spender on the international stage is another matter, as its defence budget as a proportion of its GDP is actually lower than the global average.

Equally, Mr Fox was right to point out that these figures cannot be taken at face value, and it is important to remember that estimates and foreign exchange rates play important roles in these international comparisons.

Edgar Gerrard Hughes

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