Call to Arms: a Strategic Blueprint for National Security

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The Investment Perspective

As allocators of capital, markets see themselves as rational, analytical, calculated and unemotional. By nature, equity investors providing permanent capital are the optimists of the species, their glasses are half full; fixed income investors providing loan capital and wanting their money back on the due date are innately sceptical, of necessity their glasses are half empty. While approaching investment from very different perspectives and making different judgements, they share the same fundamental characteristic: they make objective and subjective estimates about future prospects and discount them back to what they regard as the intrinsic value of an instrument today; they then judge whether in their view it represents good or poor value. Judging risk is an essential component of the calculation. Consensus, or one opinion holding a dominant sway, creates directional markets; the symptom of disagreement is volatility. Whatever the result of their analysis, their common comfort zone is what they can see, count, measure, evaluate and reduce to a number, whether it be a share price or a bond yield, or the value of a currency or any other asset. They prefer to deal real-time with what they can quantify, chart and model. Factors outside this comfort zone or beyond their view tend to be set aside, filed under the double-meaning acronym ‘TBD’: To Be Decided (i.e. defer making a decision until it is unavoidable) or Too Bleeding Difficult (i.e. absolutely no idea, therefore ignore it and hope it goes away).

Today the world is in its least stable state geopolitically since 1990 and arguably since the 1930s. The extensive analysis which follows lays out the geopolitical risks and more importantly how to help contain them and mitigate against the possibility of a risk crystallising as a real-life event.

Investors are not remote, impartial actors. When examining how it is today that many so many western governments are so financially constrained that they struggle to maintain national security policy and to contain risk, investors need to ask themselves to what extent they themselves have been complicit. Governments set fiscal policy and central banks apply the appropriate monetary policies. But if enduring deficits require support from borrowings (as has been the case continually in the UK and the US for 25 years), markets have a significant say about the limits and the cost, the latter of which is expressed not only through the nominal bond yield but also the differential spread against other countries’ bonds as a measure of relative risk.

Investors should delve deep in to their souls and ask themselves whether, even if the value of their investments were appreciating, was it responsible in the post-Global Financial Crisis decade to support the concept of ‘free money’ when the central banks kept interest rates close to zero or even below it? Even more pertinently in the near-two year period spanning mid-2019-early 2022 when more than a third of government debt globally was on a negative yield and markets were actively paying governments to borrow, was that rational and wise (when even the German 30-year bond was on a negative yield, bond holders were inventing excuses as to why this was sound portfolio management: it was justified that a pre-determined fixed loss at the end of 30 years gave a secure anchor point in a bond portfolio and therefore fulfilled a role and provided value: surely the definition of the Law of the Greater Fool when investors should have been saying ‘this is quite mad’ rather than ‘this is completely justifiable’)?

Today, at the dawn of 2025, the reckoning is here. The French government has imploded thanks to irreconcilable differences about how to deal with a burgeoning deficit and a mountain of debt. Germany’s Traffic Light coalition did the same, driven onto the rocks over disagreements about how legally to fund growth and to stop the economy ossifying. On wobbly fiscal foundations beforehand, Rachel Reeves’s budget in the UK has made a bad situation a whole lot worse. With out-of-control borrowings, the US is about to confront the debt ceiling again. In the meantime, NATO leaders and Donald Trump are demanding a big increase in defence spending which few members will be able to meet, at any rate not quickly. There will be painful choices and compromises in the near-term but the threat to national security does not become less simply because governments don’t have the financial wherewithal to mitigate against it. The opposite is likely to be true: those who would do us harm are more likely to take advantage of our increasing relative weakness.

However difficult a challenge politically, surely the confluence of a series of events (high debt, high funding costs, high tax burden, no growth, increasing geopolitical risk) all points to a fundamentally different way of doing things: one which delivers better tangible outcomes for less government spending, which reduces the tax burden and improves investment opportunity. A strong, vibrant, match-fit, innovative and competitive economy ultimately gives a government options: it puts the country more in control of its destiny rather than it being constantly at the mercy of events. The investment community is central to this, not just thinking specifically about military defence but also seeing through the lens of industrial and technology policies, and food and energy security.

The government wants investors to ‘get behind defence’. The trend towards ESG investing and its long list of exclusions (i.e. what it will not invest in) has tended to have negative consequences for the capital available for defence contractors. Nobody can dictate what anybody else’s ethics should be, but surely there is a strong moral argument about our communal safety and the protection of our society and the need to defend us. That requires investment. The crude ‘you’re either with us or against us’ argument is reductive and unhelpful, but in terms of national security investors should ask whether their consciences are clear if they abrogate the responsibility to others to look after them.

When it comes to investors and national security, if markets think they are aloof and impartial, nothing quite drives the message home as the following anecdote: at the Jupiter Investment Conference in 2016, General Sir Richard Shirreff was the guest speaker. He had just written a novel entitled “War with Russia, 2017” (a good yarn labouring under clunky dialogue, its foretelling of what would happen in Ukraine was entirely accurate, and it offers a remarkable insight from a former NATO insider about how the politics of decision-making work in practice; spoiler alert, coming within a cat’s whisker of Armageddon, common sense prevails in the end!). An adviser asked, “General, in the event of a tactical nuclear war launched from Kaliningrad, what would be the effect on European GDP?”. To which Shirreff shot back, “you won’t care. You’ll be looking for the biggest kitchen table to hide under to avoid being burnt to a crisp”. Best make sure it never happens so we don’t need to find out.

For the investment community wanting to understand defence, the risk analysis and the insights as to how NATO and the UK government procure military kit are intended to inform and educate as they distil down towards making direct investments in defence contractors. For policymakers, especially government, the military and the civil service, given it is taxpayers and investors who foot the bill, the market perspective on the financial framework supporting defence and national infrastructure spending should be instructive. 

For digestibility, what follows is divided into five parts:

• Part 1: Executive summary; conclusions.
• Part 2: ‘NATO: Mutually Assured Protection?’: modus operandi; budget; political risk.
• Part 3: ‘Assessing risk in an unstable and dynamic world’: geopolitical risks.
• Part 4: ‘Auditing the British Armed Forces’: capability; capacity; resilience.
• Part 5: ‘UK policy-Taking back control’: the political and fiscal requirements for national security; holistic strategy; the UK defence budget; procurement. 

Part 1: Executive Summary and Conclusions

As we embark on the second quarter of the century, armed conflict or its direct effect pervades almost the entire line of land mass from the Gulf of Aden to the Baltic. At least 12 countries are directly involved as combatants or are in the firing line. In the Ukrainian war, the 32 members of NATO supporting President Zelensky are ranged against North Korea as a direct combatant backing Vladimir Putin, and Russia’s proxies including China, Iran, India and South Africa who are actively helping maintain Putin’s ability to wage war. If World War Three is not already formalised, it is getting very close.  

A new UK Strategic Defence Review is under way under the responsibility of current Defence Secretary John Healey. In fact it is led by one of his predecessors, Lord (George) Robertson of Port Ellen, a former Labour Secretary of State under Tony Blair who subsequently went on to be a successful Secretary General of NATO. Roberston is being helped by two additional Reviewers, General Sir Richard Barrons (former head of Joint Forces Command) and Dr Fiona Hill CMG (highly respected British academic who served under Democrat and Republican US administrations including Donald Trump’s first where she was an adviser on Russian Affairs for National Security).

Why emphasise the word ‘current’ in the context of Healey? Because including Robertson he is the seventeenth to hold that position since 1990 (under Gordon Brown to whom defence was so unimportant, the role was combined with managing the Scottish Office and looked after as a job-lot under Des Browne) and the eighth since 2010. The average tenure over three-and-a-bit decades is two years; since 2010, it is one year and nine months, including Ben Wallace being in post for four years. This will be the 11^th such review or re-fresh since 1990 (Options for Change) at the end of the Cold War, and the sixth since 2010 (David Cameron’s Strategic Defence and Security Review, SDSR) in the post-Global Financial Crisis era; over the last decade-and-a-half, what is defined as ‘strategy’ has had an average duration of less than two-and-a-half years. As a full Review, this one however stands out having the benefit of three years’ perspective of seeing Russia in action in a full-scale state-on-state war. Ukraine is the most current, most knowledgeable and battle-tested armed force in the world when it comes to conflict with Russia. Much has been learned from the Ukrainians not only about how weapons and systems perform but also new tactics when it comes to trying to prevent Russian advances or to outmanoeuvring them. There is speculation that with the government’s enthusiasm for “the white heat of technology” being the cure for all ills, much of the focus of the SDR will be on re-defining the role of the armed forces to rely more heavily on technology (e.g. AI, Big Data, digital solutions) as the preferred solution with which to outwit an enemy, rather than more people and more firepower with which to defeat him.

It is no exaggeration to say that every defence review since the Cold War has left our armed forces less capable and weaker than they were before the review took place. ‘Hollowed out’ is the common phrase. Being generous, most set out set out with the intention of balancing the defence of the Realm, looking after our national interests and meeting our NATO and other treaty obligations, with affordability; none could claim to have addressed genuine capability and the need for fundamental reform in defence spending. There are two clear cases of deliberately cutting the financial commitment being the strategic aim: the Conservative 1990 post-Cold War ‘Options for Change’ programme was an active decision to halve the percentage of GDP allocated to defence in favour of health spending and benefits; however much the post-Global Financial Crisis Coalition 2010 Strategic Defence and Security Review (SDSR) was dressed up as grand strategy, that review was an implicit exercise in reverse engineering. Much more concerned with saving money than meeting the strategic threats, it was based on the Treasury application of false logic: essentially the starting thesis was that chancellor George Osborne would not pay to maintain standing forces in Europe for a state-on-state war which might not happen, therefore state-on-state war would not happen. He failed to understand that weakening our defences would raise the risk of that very eventuality, even if not on his watch.

All were the culmination of the best military, intelligence, civil service and industrial brains under the direction of ministers and within the constraints of each review’s ministerial terms of reference and budget. Yet here we are today at the turn of 2025, facing the biggest and most complex global threats certainly since the Cold War, possibly since the mid-1930s. The geopolitical analysis of such informed persons as the current heads of the British Army and the Norwegian armed forces, a British former Deputy Supreme Allied Commander NATO, the most recent UK defence secretary and the German defence minister is that we are potentially on the verge of World War Three within the foreseeable future, perhaps within as little as three years. Yet Great Britian has the smallest professional Army since the Napoleonic Wars and worse, its stocks of anti-tank missiles and artillery shells are so low that its fighting endurance is measured in days and weeks, not months and years; the Royal Navy is so hopelessly out of balance that what little still floats is virtually unfit for purpose; and the Royal Air Force has so few combat aircraft and so many operational commitments that the rubber band that keeps it aloft has already almost reached breaking point.

The SDR Terms of Reference (ToR) of the Review are published on Gov.UK. Its Purpose is defined as follows:

3. The SDR will determine the roles, capabilities and reforms required by UK Defence to meet the challenges, threats and opportunities of the twenty-first century, deliverable and affordable within the resources available to Defence within the trajectory to 2.5%. The Review will ensure that Defence is central both to the security, and to the economic growth and prosperity, of the United Kingdom.

There is the old joke about asking an Irishman the way to Dublin; his oblique but entirely logical answer is “whichever way you want but you wouldn’t be starting from here, now, would you?”. But with UK defence, ‘here’ is where we are and ‘Dublin’ seems no more than a Utopian concept rather than a firm destination. For the uncomfortable truth, described by one General as the “Voldemort Factor” (the one of which we do not speak), is that today’s armed forces are configured for threats that existed more than a decade ago while being directly confronted by ones that were dismissed at the same time as never going to happen; and yet in a flash-back to a previous era, here they are.

 Anyone from the armed forces, the defence industry, the MoD or central government reading what follows will almost certainly tut-tut and say, “yes, we know all that. Tell us something we don’t know and come up with the solutions”. To which the riposte is blunt: if you know it, and your predecessors knew it, please explain today’s parlous predicament. Perhaps a good dose of the obvious is just what is needed. Apart from “within the trajectory to 2.5%” there is absolutely nothing in the overarching ToR above that has not appeared in virtually every SDR in the past three and a half decades.

This analysis set out initially to focus specifically on the military. However, as it developed and taking the title of the Review at face value and the liberty of adding the words ‘and security’, in fact it is a strategic polemic, a blueprint for broader national security and self-reliance. Invoking Sir Keir Starmer’s phrase on the election stump, it is about ‘taking back control.’ The author’s is a very different slant from Starmer’s about what it is to take back control. The SDR terms of reference give the impression that recommendations will be considered rather than automatically accepted (though if they are within the ToR constraints there is no reason why they should not be accepted). The inference is that some debate will follow. It is too late for that now given the pace at which events are overtaking us. As General Sir James Everard observes, opponents such as Putin will not hang about waiting for us to take our time thinking about getting stronger; if he’s going to act, the rational player will take advantage of our weakness and strike early.

The author is most grateful to General Sir James Everard, a former NATO DSACEUR, for his invaluable insights into NATO, and correcting obvious factual errors. All opinions expressed in this paper and any errors of commission or omission are those of the author alone, unless specifically referenced.

Conclusions

It is beyond the time for recommendations, so my conclusions come in the form of instructions.  If I am at risk of being accused of being unimaginative, precocious and presumptuous, or war-mongering or looking for ghosts where there is none, so be it. I’d rather be safe than sorry. Would you not too?

Immediate: give the forces a fighting chance:

1. Ammunition: Stocks of ready-use artillery ammunition and anti-tank missiles need not only replenishing immediately to replace those used in Ukraine, but inventories need building much further to meet the full combat need of the British Army for at least a year.
2. Lethality: For the Infantry, adopt Boxer as the light-role armoured personnel carrier but replace the Warrior Infantry Fighting Vehicle with either the US Bradley Fighting Vehicle or Swedish CV90.
3. Numbers (tanks): We need more not less heavy armour capacity. Upgrade all Challenger 2 hulls to Challenger 3.
4. Numbers (personnel): The armed forces manning crisis must be reversed. Set the medical admission default to ‘admit’ rather than ‘reject’; admission processing times need to be significantly speeded up (if Capita can’t do the job, find another who can or take it in-house: if a fifth of the forces are unfit to fight, at least they can recruit and train others who can).
5. Blow it up and start again: Defence procurement needs a top-to-bottom restructuring. Project delivery times of two decades are unacceptable. They need reducing by two-thirds. The pre-requisite is a radical overhaul of civil service, military but most of all government decision-making processes.
6. Life support: The National Ship Building Strategy needs turbo-charging. Construction hall capacity needs doubling and delivery times halving. The pre-requisite must be government orders significantly to increase the frigate and destroyer force at least three-fold back above 40 ships, and to add strategic logistics capacity to keep the two carriers at sea and operational. A committed naval expansion plan would draw in additional capital and attract greater competition, leading to keener pricing and faster delivery (and the prospect of actually going to sea would make it easier to recruit people who want to be sailors).
7. U-Turn: Reverse the decisions to scrap the amphibious assault ships HMS Albion and Bulwark and maintain them in service until their planned replacements arrive in 2038. The same with the RFA logistics ships facing the axe.
8. Ensuring The Few don’t become fewer and vanish: Shelve the plan to bin the Tranche 1 Typhoons. Or if impossible because of consortium constraints and lack of spares, replace with comparable but newer off-the-shelf substitutes e.g. General Dynamics F-16. Complete the original Lockheed F-35 purchasing programme thereby justifying the carrier rationale and restoring genuine strategic power. Bin the Pumas as announced, but stay the execution of the obsolescent Chinooks until replacement capacity is in place.
9. Missing in action: if conflict comes, direct invasion of the UK by the Russians is unlikely but aerial attack is highly probable. We have no Iron Dome. Invest in layered air defence systems. If the received wisdom is still that it is not worth it, the quid pro quo is comprehensive civil contingency disaster planning.
10. Doctor! Doctor!  Restore military medical services to be able to cope with mass battle casualties.

Political: ‘take back control’

1. Back to the future: Threats determine defence capability; the threat is not conveniently tailored to the defence budget. Near-term defence spending needs to more than double to 5% of GDP to mitigate against the simultaneous double-hit confronting the UK: the erosion to our armed forces over the past 30 years while threats have demonstrably multiplied over the past five years. All three armed services need to be at least double the size they are today, not just to meet NATO needs but to create their own self-reliance in the event we end up on our own. A hypothecated National Defence Loan (NDL, last raised in 1936) should be raised to underwrite the longer-term requirement to restore the army, navy and air force to 1990 end-of-Cold-War levels.
2. The Trump-Rutte axis and the dead hand of debt: The NATO spending bar is likely to rise to 3% of GDP in any case. An ongoing requirement 50% greater than today’s minimum qualification may be the norm to guarantee the Americans’ commitment to our security. UK Debt/GDP is already 100%; the tax burden is the highest outside wartime; we spend double the defence budget on debt interest payments. This needs to be the wake-up call for full-scale public sector reform and a re-ordering of public finances. Lower debt and interest offer choices for governments; high debt and interest are active constraints.  
3. ‘How’ is as important as ‘how much’: We spend more yet have less to show for it. Dispassionately dissect why it is that every marginal pound of defence expenditure yields a negative return and diminishing outputs, and has done for decades. Failure to understand why, and to remedy, will render the whole point of the SDR null and void.
4. Institutionalised torpor: With 17 secretaries of State in 35 years, it would be unsurprising to find the MoD is ossified, infected with Paperclip Syndrome. Risk aversion is all-pervading. The MoD is unique in government departments having large numbers of serving professionals rotating through on two-year postings, working alongside permanent civil servants. It ought to be a hive of dynamism, the one department in which thinking the unthinkable and preparing for it is a requirement not a heresy. John Healey needs to inculcate his department with a sense of risk, urgency, pace and efficiency.
5. Money where your mouth is: The Prime Minister wants investors to ‘get behind defence’. In the national interest, so they should. However whether providing permanent equity capital to UK defence contractors, or as secondary investors, they will be reluctant participants on financial grounds if they think returns will be inadequate because of inefficiency and unnecessary frictional costs. If funding an NDL through the bond market a) they need adequate compensation for the duration risk and b) confidence of repayment. Investors are unlikely to take speculative risk: as the sole commissioner/customer/licensor of military hardware and systems, the remedy is entirely in the government’s hands. An NDL should be conditional on total procurement reform.
6. Hard hats and velvet gloves: our new foreign policy is baffling and incoherent notably with regards to the US, Israel, China and the British Overseas Territories. Reset.
   
7. National Security: industry, technology, energy and food security are integral to national security and should be embedded in the Review, not peripheral to it.
8. It cannot happen here! Actually, it can: wars in the Ukraine and the Middle East seem very dislocated from day-to-day life in Britain. That a full-scale war involving the UK and its people should not happen is very different from saying it will not happen. A public education programme explaining the need for defence, national public involvement and resilience needs to be made.
9. To the Colours! Conscription is a step too far, though the case for a return of National Service is stronger. Voluntary military service should be instinctive and the Reserve forces should be expanded significantly.

Listen to Part 2

Part 2: NATO, Mutually Assured Protection?

“We want to live in a world where sovereignty, territorial integrity, human rights and international law are respected and where each country can choose its own path, free from aggression, coercion or subversion. We work with all who share these goals. We stand together, as Allies, to defend our freedom and contribute to a more peaceful world.”

NATO’s vision is as honourable as it is clear and explicit. Under the bonnet are a mass of complexities in an alliance that now has 32 members spanning two continents.

Munich 2025: NATO’s cross-roads: it was General Sir Hastings Ismay who in 1949, at the foundation of NATO of which he was Secretary General, pithily summarised its purpose: “it’s there to keep the Americans in, the Russians out and the Germans down”. Eight decades later at the outset of President Trump’s second term in the White House, intense focus is on the American commitment and the consequential risk to European security from Russian aggression. Regarding Germany, albeit in very different circumstances from the aftermath of World War Two, nevertheless that country is going through a period of national insecurity and introspection. History says that NATO to date has been a great success: no state enemy has attacked a NATO member in the entire time of its existence. Putin’s miscalculation with Ukraine was quickly to tip Finland and Sweden from being neutral states to NATO members.

Today, the concept of Mutually Assured Protection is certainly under the most uncomfortable scrutiny, possibly under terminal threat. At the February 2025 Munich Security Conference, variously through his Vice President JD Vance, the US Secretary of Defense Pete Hegseth and Secretary of State Marco Rubio, Trump launched a deeply destabilising diplomatic Exocet to the heart of NATO. Its detonation has rocked the foundations of the alliance. Is it an American statement of intent, or another Trumpian negotiating ploy?

The opening gambit was no surprise given Trump had said it many times on the election stump: the demand for members’ defence budgets to rise to a minimum of 5% of national GDP and for Europe specifically to take greater responsibility for its own defence. But the profound new shocks were twofold: first, Vance’s assessment of what he termed ‘the enemy within’: specifically the accusation that Europe is against democracy; whether he meant to or not, he implicitly made US mutual security guarantees conditional on freedom of political expression and understanding in Europe. Second, that in pursuit of a peace deal in Ukraine, Trump’s and Putin’s bilateral talks, at the beginning at least, explicitly exclude Ukraine and European members of NATO all of whom are aghast and indignant. Ukraine’s President Zelensky also put Europe under the spotlight, calling for the creation of a ‘European army’.

At the time of publication, almost to the day the third anniversary of Putin’s invasion, the political situation is intense, febrile and dynamic.

Let me deal first with the imminent Ukrainian peace talks: confronted with what he has inherited, Trump maintains that it is unrealistic for Ukraine to see its pre-2014 borders restored. That is pragmatic: Russia is not going to surrender the Donbas or Crimea in their entirety, even if there is some horse-trading to be done over sovereign Russian territory in the Kursk region occupied since the summer of 2024 by Ukraine. But Trump is deluded if he fails to understand that as President of the United States and Commander-in-Chief, rather than Donald Trump billionaire property tycoon and deal-maker c/o Mar-a-Lago Florida, his personal acts and those of his country are indivisible. At the bottom of all this is the unarguable fact: that alongside Russia and the United Kingdom, the United States was the third national guarantor of Ukrainian sovereignty under the terms of the 1994 Budapest Memorandum. And they still are. Clearly Russia has violated the agreement. But the US and the UK both stand accused of dereliction of their explicit duty of care to Ukraine no matter how much after-the-event treasure has been expended since the invasion helping Kiev. The invasion should never have been allowed in the first place.

Transactional Trump is intent on doubling down: as is currently in the frame after any peace deal, Ukraine will not be allowed into NATO (that was Joe Biden’s position too and however much others might disagree, while Article 10 of the NATO treaty says that any alliance member can veto a new country’s accession, Ukraine’s prospective membership is a non-starter for the foreseeable future); NATO peacekeeping forces, a proposal already rejected outright by Putin, will explicitly not include US troops (Trump sees this as purely a European problem, a widely-held view in the US, but one not shared by his European allies and specifically the UK); the cost of re-building Ukraine will be conditional on the US being repaid in kind by plundering Ukraine’s vast natural resources. Trump the dealmaker thinks it’s smart. The premise should be honouring the protection of Ukraine and the enforcement and integrity of its sovereignty, not a convenient carve-up such as was foisted upon Czechoslovakia in 1938 (also in Munich, and Chamberlain’s piece of paper declaring ‘peace in our time’). If the expediency is merely to get the US taxpayer off the financial hook, and a return to ‘normalcy’ in US/Russian relations, morally Trump’s plan is beyond bankrupt, even if it brings so-called peace.

EU: swimming naked when the tide has gone out: Second, let me turn to Europe. The EU wants to play with the grown-ups: it sees itself up there with the US and China as one of the three Great Powers. But the very fact of it not being a nation state, merely a federation of 27 countries only 20 of which have a single currency, precludes it from doing so. It has just been very publicly dismissed and demeaned as irrelevant by both Trump and Russia in the opening peace talks.

The EU still suffers the Ghost Busters’ conundrum: “if there’s something strange in the neighbourhood, who you gonna call?” Who indeed.  It has no head of state, but has numerous presidents: one each for the Commission, the Council of Ministers, the Parliament. Of the four pillars of governance (Commission, Council of Ministers, the European Court of Justice and the Parliament), by a long way the least relevant is the Parliament. It is a rubber stamp talking shop. Voters are not literally disenfranchised: they have the facility to vote in EU elections. However, the significant democratic deficit which is tantamount to disenfranchisement arises from the act of electing a parliament with no direct constituency representation and which makes almost no difference to pan-EU policy, how it is developed or how it is implemented. By extension voters in EU elections have very little if any say over how policy affects their own lives. Vox pop counts for virtually nothing.

This fundamental democratic deficit at the heart of the EU will not be overcome without political union and full electoral reform. Effective disenfranchisement leads to political instability and polarisation, the result of which is rising ‘populism’. Whether it is to the political right or left is irrelevant. Using such loaded language as ‘threat to democracy’, ‘unacceptable’, ‘must be stamped out’, ‘punished’, former and current EU luminaries including Jean-Claude Juncker, Guy Verhofstadt, Donald Tusk, Emmanuel Macron, Olaf Scholz and Ursula von der Leyen fail to understand the entomology of ‘democracy’: ‘demos’, the people; ‘kratos’, the power. Our own prime minister is no stranger either: he fought tooth and nail for a second Brexit referendum to overturn the democratic result of the ‘Leave’ vote. They are in denial over both elements of the word however much they refute Vance’s argument. Any regular readers of the weekly Jupiter Merlin Macro columns, or who listen to our webcasts, will have heard me refer to this very subject boringly and repetitively over the past half-decade.

Directly linked is Zelensky’s call for a ‘European army’. This too is not new: over the past twenty years several EU leaders have made the same demand. Armed forces are one of the essential trappings of the nation state. As we have established, the EU is not one. A fundamental question if an EU or wider European armed force including the UK were to be created: who would control it? On whose authority would it be deployed and go to war, and in pursuit of whose policy and under whose rules of engagement? In line with the Clausewitz dictum (see Part 5) this is not a military question; it is entirely political. It goes right to the centre of sovereignty and democratic accountability. Until this foundational principle is explicitly resolved, a centralised armed force should be strongly resisted.

A core tenet of NATO is the concept of ‘shared burden’. It is the American conviction of Europe and Canada not sharing the financial burden which is the cause of today’s internecine strife. But a European solution merely shifts the same problem to a different geography. It does not make the problem go away. It would still beg the question of who pays for Europe’s defence and who underwrites the financial risk? In the absence of America, European states including the UK would all be forced to double or even treble their defence expenditure.

The fact is that the economies of all the countries on the front-line with Russia or its proxies, those directly faced with the possibility of invasion, are small; even Poland. Not one of them has a GDP greater than $900 billion and each of the Baltic States is sub-$100 billion. The European defence budget would be heavily reliant on the UK ($3.3 trillion GDP), Germany ($4.5 trillion), France ($3.0 trillion), Italy ($2.3 trillion) and Spain ($1.5 trillion) to plug the gap left by America when the threat remains the same with or without the US as a participating ally. France (115% in 2025), Italy (135%) and Spain (108%) all have debt/GDP ratios at least 80% greater than allowed under the EU’s financial stability mechanism maximum of 60% financial gearing; only Spain is within touching distance of the maximum permitted deficit/GDP of 3% (but Madrid currently only spends 1.2% of GDP on defence). Germany is hamstrung by its national law of not allowing a deficit greater than 0.3% of GDP except in emergency; despite decades of extreme political indolence on defence spending, perhaps today’s situation satisfies the definition of ‘emergency’. Given the potential uplifts in defence spending are multiples of today’s sums and would require an enduring commitment measured in percentage points of GDP, the implications for public sector spending, taxation and borrowings are obvious. In the absence of fiscal union (which cannot be achieved without political union), the next fundamental and logical question arises: in the event it is national borrowings which do the heavy financial lifting, who stands surety for the debt? There is no EU debt union to underpin monetary union.

The Danish finance minister insists the EU’s fiscal rules (i.e. the terms of the Stability Mechanism) must be relaxed to allow greater deficits and debt. That is merely to apply a sticking plaster to a haemorrhage. What should be unarguable is the need to abandon the embedded, enduring and lazy Keynesian orthodoxy that pervades most major western economies. It is that myopic collusion which has given rise to historically high and unsustainable national deficits and debt levels, as well as debilitating tax burdens. It needs to be replaced with fiscal discipline and prudence based on wholesale reform of public sector expenditure, including major reform of defence procurement. Otherwise, western governments will be simply swapping defence risk for financial risk; one is physical, the other economic but in their own way both have the potential to be existential.

Trump and Putin have caused all Europe’s obvious structural shortcomings to be exposed and crystallised very quickly. The EU is a top-heavy, heterogeneous edifice whose foundations are built on sand. Having ignored the gaping chasms in its governance for more than quarter of a century, the EU has only itself to blame. As to whether it is capable of successfully integrating and completing full Union from here remains to be seen. The political challenge is as formidable as it is unavoidable.

As will be discussed in Part 5, the same fiscal constraints are confronting the UK too.

But it is not just about Trump: in the light of this it is of course popular currency to cast Donald Trump as NATO’s principal internal threat, its home-grown monster and eminence grise. He does not help himself (on the contrary, he relishes being provocative). But it would be a big mistake to assume that a propensity to cause instability is his own peculiar preserve. For years, led by Germany and France, key EU member states have tried to disintermediate the US defence hegemon in Europe. As discussed, the EU’s determination to be an identifiable global power to rival the US and China remains a misguided pipe dream so long as it is nowhere close to being a homogenous nation state (which has the prerequisites of political, fiscal and debt union to complement monetary union); it has an almost childlike insecurity, an inferiority complex and resentfulness of America’s influence even though the US was and still is underwriting NATO’s bills and providing most of the military hardware, manpower and effectiveness for Europe’s defence. It was in 2019 that President Macron mischievously and corrosively pronounced NATO ‘brain dead’.

However, in 2021, it was thanks to a US Democrat President, Joe Biden, that NATO came closest to a genuine self-inflicted near-death experience. Biden without any reference to his allies (and notably the British who were much the most important and wholly enduring partner) summarily pulled all US forces out of Afghanistan literally without a by-your-leave. I wrote at the time that the unseemly, chaotic flight from Kabul as a rampant (and surprised) Taliban took full control of the country without opposition was not only a disaster for NATO and the people of Afghanistan, but the repercussions ‘would be felt all the way from Taiwan, through central Asia, to the Middle East, the Balkans, Ukraine and up to Finland’. NATO’s literal dis-integration in Afghanistan did not cause Putin to invade Ukraine but it did give him the confidence that were he to pursue that course of action, there would be no direct retaliatory response from NATO members (he made plenty of other mistakes and miscalculations but that was not one of them: while France and Germany were in full appeasement mode with Putin, it needed the unlikely figure of Boris Johnson to put vim and vigour into the US and broader NATO response, not least that only a few weeks before the invasion, Biden had publicly said that a limited Russian incursion into Ukraine would be ‘acceptable’).

Robust military strategy: Militarily, NATO is well back from the brink, far from brain dead. It has, or had, recovered its sense of purpose and poise and something of its mojo. Harried by Trump’s first term remonstrations against delinquent members (at that time, all bar 6) and accelerated by the reality of the first state-on-state war in Europe since 1945, most governments have made a determined effort to meet the minimum requirements in terms of defence and equipment spending. NATO strategists have a robust, multi-layered plan for every conceivable manner of Russian aggression towards its members and how best to deal with it. If there is a military tension, it is between what resources the Supreme Allied Commander Europe (SACEUR) needs to fight a full-scale war tomorrow, and what national governments account for in today’s spending for resources which might not be available for 20 years. There may be widespread disparity between members’ military capabilities, but other than the universal shortage of munitions, military thinking and awareness are not NATO’s problems. The future problem is political. Even in a formal alliance, any sensible government’s defence policy should contain an element of scepticism and a constant re-evaluation of ‘who can I trust and who can I count on’, the corollary of which is the reverse: ‘can others count on me too?’

A military alliance but a political construct: NATO’s is a democratic alliance. It is the nature of the beast that facing democratic governments on fixed electoral cycles is the threat posed by autocracies/theocracies/dictatorships often with enduring regimes and a very different relationship with their publics. NATO’s great strength is its size and its economic resources. Pooled together, its aggregate share of global GDP is a mighty 47.4%. Add in Japan, Australia, New Zealand and South Korea and it is over half the global economy. Its great weakness is its governance and the number of countries and governments involved: at 32 members, each with an equal vote and the right of veto, and requiring unanimity to grant accession to a new member or to agree on Article 5 being invoked, it runs the risk of being almost unmanageable. Even when in agreement, decision-making can be sclerotic, with the potential to be catastrophically slow. The Secretary General (SG) derives his/her authority from the consensus of the 32 governments in the Alliance. This is fundamental: the SG communicates what members have already signed up to. A key role, particularly when a member government changes, is to educate/remind the new incumbent precisely what it is their country is already committed to. The SG’s role is that of an international hustler: herding cats in the right direction requires charm, persuasion, political guile, a dash of old-fashioned arm-twisting and a hint of judicious menace. Mark Rutte, despite having his Dutch government collapse under him, was undoubtedly the person for the job: an experienced and internationally respected European former prime minister who has a proven ability to get on with Donald Trump.

But if the military has an enduring consensus on strategy, the fact is that each country’s military leadership at NATO headquarters reports and is accountable to, and takes direction from, its own national government first; its responsibility to NATO is secondary. This is why the SG role is so critical holding the political consensus together. When confronted with the reality of conflict, the recent history of NATO is rich in political indecision, splits and half-baked responses. Neither Gulf War produced a NATO participation consensus, even the First Gulf War to evict Saddam from Kuwait which had an explicit UN mandate and involved other non-NATO Coalition forces. In the Balkan conflict, the NATO force in Kosovo had only partial support from EU member states despite the war being on its doorstep. George W. Bush invoked Article 5 following the 9/11 attack on the Twin Towers; with a few honourable exceptions (including the UK) the response by most NATO members to participate in the subsequent Afghan campaign to combat Al Qaeda was nugatory at best, zero at worst.

When NATO forces have been committed, the purely military strategy has usually been very successful if often gruelling and difficult (for example Iraq was much easier than expected both times, Afghanistan much more difficult; the less said about the political misdirection in Libya and Syria the better). However, with the exception of the Balkans, all the military achievements have been undone by lack of after-battle Phase 4 operational planning: essentially an orthodoxy dictated by defence secretaries Dick Cheney and later Donald Rumsfeld, it was the neo-con doctrine that “the US does not do nation-building”. Leaving physical, social, economic and governmental rubble behind for someone else to clear up and piece together after you’ve bombed the place to bits and walked out, has been an abject failure. Political vacuums will always be filled, often by bad actors who perpetuate instability or those such as the Taliban who are even more repressive than the regime they replaced. It is a significant operational failing of NATO; it is entirely a function of the dominance of the US budget relative to the other members that what Washington says, goes.  

As strong as its weakest link: The core tenet of NATO is that of mutually assured protection. It has great strength when its integrity is intact. Break that and the whole edifice disintegrates. The examples above of variable rather than unanimous responses are to what can be termed either ‘out of area’ or ‘expeditionary’ situations, rather than NATO itself having been directly attacked, even at 9/11. But today, particularly in the context of political change among its members, that unconditional and unequivocal underpinning of NATO is in question. Trump potentially not turning up is the most talked about example. But could it apply to the UK too? Playing devil’s advocate: we are one of the designated international ‘lead’ nations responsible for the defence of Estonia: will we unconditionally go to the aid of Estonia and be prepared potentially to ‘waste’ a large part of the Army reinforcing the current small UK garrison (around 900 troops comprising a squadron of heavy tanks, a recce unit and most of an armoured infantry battalion, plus an RAF Typhoon flight) in the event of a Russian attack? The automatic assumption is yes but what if political will is lacking or public opinion says otherwise? It is far from unthinkable: we did precisely that with Ukraine when in 2014 we failed to honour the Budapest Memorandum when Crimea was annexed, and we failed in 2022 to prevent a full-scale invasion (if we thought we would never have to honour the obligation we should not have made the commitment at all: it is a lesson for anyone else to whom we might strike the same bargain including all other Major Non-NATO Allies).

That requirement of unanimity to invoke Article 5 is a facet of governance that our opponents, particularly the Russians, will try to exploit. Putin will seek the weak spots which politically might produce an abstention or even better an outright veto. Slovakia’s government under Robert Fico has branded all foreign NATO troops hosted on its soil as ‘Nazis’ and is openly hostile towards Ukraine. Rumania only narrowly avoided electing an anti-NATO nationalist to head its government at the end of 2024; there is no guarantee the far-right will not succeed in future. Hungary has robust defence spending and is an active NATO member but its president Viktor Orban maintains open dialogue with Putin; he claims he is a bridge between the EU, NATO and the Kremlin while others suspect he’s either disingenuous or being played for a fool (more pragmatically with a heavy reliance on Russian gas, arguably he has little choice but to treat with Putin). Turkey has one of NATO’s biggest defence budgets; it is the guardian and bastion of NATO’s south-eastern flank; Recep Erdogan and Putin have been on opposing sides in the long-running Syrian saga, and also in Libya; on the other hand, Erdogan bought air defence missiles from Putin and was a willing participant in the October 2024 BRICS summit hosted by Putin in Kazan. Washington remains sceptical as to whether Turkey is a reliable ally or a counterparty which hedges its bets and will go with whatever is in Turkey’s best interests at the time depending on the deal on offer. Even in western Europe there are uncertainties. Marine Le Pen in France is antipathetic to Ukraine and an admirer of Putin: what if she becomes France’s next president? In Germany, both on the far right and the far left, nationalism is demonstrably on the rise as is hostility towards Ukraine (the majority of Germans do not want Germany to provide either military or financial support to Zelensky, according to YouGov); even if a centrist coalition is elected in February, that broad shift in public attitudes will be difficult to ignore.    

Shifting political sands: The political sands are constantly shifting. Just look at the photo of the key western leaders taken on OMAHA Beach on June 6th, 2024, at the Normandy commemorations. Seven months on: Sunak (in fact it was David Cameron standing in, Sunak having done an early bunk to do an ITV election interview), gone; Scholz, about to be gone; Biden, gone; Macron, in office but not in power, on political death row praying for a reprieve. What has followed in each case, or is likely to, is a government with different priorities from its predecessor, different views about Ukraine, different views on Putin, different views on China, Israel, defence spending etc. When Trump raises the minimum GDP spending bar from 2% of GDP to 3% or even higher, divisions are going to appear immediately about affordability given most will have to increase national defence spending by at least 50% from their current levels. Two supposedly cornerstone governments, those of France and Germany, have just imploded because of irreconcilable differences about how to manage their deficits while trying to maintain economic growth; France’s almost total fiscal preoccupation on the hard left and the hard right (at both ends of which spectrum lies the real power in the French parliament) is with reversing Macron’s entirely rational and much needed pension and benefits reforms. The result will push the deficit towards 7% while Brussels insists the deficit/GDP ratio is more than halved to a maximum of 3%; increasing defence spending by 50% or more is simply not on any French party’s agenda. In Germany, to produce a legal budget, Scholz has just had to scale back on what should have been catch-up defence spending promises and has halved the proposed financial aid to Ukraine. The price or risk of failing to meet Trump’s demand is that in the event of an attack by Russia, Trump decides he’s going to stay away. How much do you want to test that he’s not bluffing?

Even if Trump does honour his commitments to Article 5 (and according to YouGov US public opinion strongly supports America’s NATO mutual defence obligations as does the Pentagon and the great majority of Congress), the greatest risk and the most likely series of events NATO will face is that of an isolated attack quickly becoming an all-consuming global conflict. If China attacks Taiwan, and the US, Australia and Japan are fully preoccupied dealing with Taiwan by going to its aid, that is precisely the time that Russia would opportunistically make a move in eastern Europe, while Iran would take aggressive action in the Middle East and North Korea would join the party too by invading South Korea (the same will happen if Russia is the lead actor and the US is engaged in Europe: China will have a crack at Taiwan, splitting the alliance etc). Politically, non-US NATO members should not be framing their decisions around Trump-proofing the Alliance (though if he is the lightning rod, so be it): regardless of who occupies the White House the strategic danger is that in the event of a full, all-consuming global conflict, the US cannot be saving everyone everywhere at the same time. It is particularly the case when very different from World War Two, in the age of widespread nuclear arms and the development of long-range hypersonic missiles the US mainland itself will almost certainly also be under direct attack.

While needing to demonstrate national leadership in the event of a crisis, governments are inevitably mindful of and susceptible to domestic public opinion and focus groups. A YouGov poll in 2024 tested international opinions about NATO and Article 5. On both sides of the Atlantic, the majority of those polled were in favour of NATO defending member states in general. However, when focus groups in individual countries were asked about defending named member states, significant variations were apparent. Clearest of all was that Spain, France and Germany would all convincingly vote against coming to the aid of fellow member Turkey (even the UK and America were lukewarm).

Budgeting more buck and more bang: Finally, the 2% of GDP minimum spend requirement is going to be raised to a minimum of 3% (as mentioned, Trump is gunning for 5%). It is already agreed in principle, expected to be endorsed at the annual summit in June. The terms are complex, in which the minimum proposed will be 3.7% but deductions will be made the more a country engages in joint purchases through the NATO Support and Procurement Agency. But Trump is likely to make the expenditure audit much more rigorous: he is well aware of the extent to which some governments (including the UK) are cheating the system with smoke-and-mirrors accounting by loading up additional costs which add to the headline expenditure but provide no direct military benefit. He is likely to demand hard, empirical metrics measured in bang for buck. It is addressing the theme running throughout this critique: the mismatch between financial inputs and military outputs. NATO has a ‘Capability Target’; it is one of the few elements of NATO policy that does not rely on full consensus (the vote is ‘consensus minus one’: no country can vote to support the target while unilaterally opting out on its own account). In the UK, we are on notice and likely to be publicly called out. 

The Dirty Harry challenge: A unified NATO is stronger than the sum of its parts and stronger than the opposition. United, it should be inviolate and impregnable. In the event of political dis-integration, the greater the likelihood that one or more of its members is violated, precisely what the Alliance is there to prevent.

It is exactly a year ago that Donald Trump emitted his infamous outburst about his future NATO allies: he would encourage Russia to do “whatever the hell they want” to any delinquent NATO country; “you got to pay, you got to pay your bills” he told them. Now he is President and by default leader of the Free World, what is his challenge to Russia today: is it, “go ahead, punk, make my day” or is it “go ahead, President Putin, be my guest”? The evidence points to the latter. The ball is firmly in Europe, the UK and Canada’s court to make sure it is the former.

Listen to Part 3

Part 3: Assessing risk in an unstable and dynamic world

When assessing risk, the well-established adage applies: ‘there are known knowns, known unknowns and unknown unknowns’. Another way of looking at the same problem from a policy perspective: it is all about confronting what is obvious, considering what is conceivable (whether probable or improbable is irrelevant) and having the flexibility and spare capacity to insure against the totally unexpected.

Known Knowns: flashing red, alarm bells ringing

The UK armed forces’ Chiefs of Staff regard Russia as the most significant direct military threat. The intelligence agencies, particularly MI5 (domestic counter-intelligence) and MI6 (The Secret Intelligence Service, overseas intelligence gathering) see China as the greater strategic danger. That is not to say they disagree; it means that both are simultaneously significant threats but of a different nature.

Use of the term ’threat’ implies the potential for something yet to happen. In reality the joint threat posed by Russia and China has already crystallized: through destruction of infrastructure assets (for example think blowing up the Nord Stream 2 gas pipeline; or the destruction of the electricity cable between Finland and Estonia in December); or Russian state-sponsored assassination of nationals living abroad whom it regards as a threat; Russia’s active use of asymmetric forces such as the GRU and Wagner to channel illegal migration into western countries to create societal tensions and government instability; or China’s active and orchestrated programme of insinuation and espionage in commerce and particularly western universities (even the Royal Family!). Both are actively engaged in undermining western interests including those of the United Kingdom. They have been joined and augmented by Iran and North Korea. India is complicit with Russia: Narendra Modi is on strong terms with Putin and in mopping up surplus Russian oil has knowingly helped fund Putin’s war programme.

The challenge is not new: what has changed in the past three years since Putin’s invasion of Ukraine is the fomenting of these autocracies/theocracies/dictatorships into a cohesive, identifiable military axis. Despite both being communist states, of great assistance to NATO during the Cold War era was that Russia and China at best were mutually antipathetic; they were ideological rivals. The Soviet Union was a superpower in a way that China was not but aspired to be. Today, far from having mutual contempt for each other, Russia and China are firm allies with a level of mutual dependency.  By dint of its size of population and being the second biggest economy in the world (and nearly ten times the size of Russia’s but, significantly, almost entirely reliant on imported oil of which, according to energy research analysts at Kpler, in 2024 an estimated 30% of China’s domestic consumption was provided by Russia and Iran supplying 15% each), China is now the senior partner even if it does not yet have the same magnitude of nuclear capability enjoyed by Russia. They have a formal cooperation agreement which includes joint military exercises; China is funding Putin’s war machine through substantial purchases of embargoed oil and gas and it would be amazing if through hidden channels it were not providing Russia with some form of military aid; Iran and North Korea are both supplying missile systems and ordnance to Russia in return for military intelligence and technological know-how, including nuclear; most recently Pyongyang has committed eleven thousand troops to the Ukrainian battlefield to help the Russians and is poised to provide greater numbers; western intelligence has proof that Pyongyang too is sanction-busting being in receipt of embargoed Russian oil delivered by deliberately obscure routes.

Russia: a paranoid wolf in wolf’s clothing

The risk of a post-Cold War, post-Perestroika reaction from Russia was recognised as far back as the mid-1990s. Susceptible to the seductive overtures from the West and as a positive statement of disengagement from Moscow, several former Warsaw Pact⁵ countries made it their public aim to join either the EU or NATO or both. Whether the post-Cold War ‘peace dividend’ (winding down defence thereby freeing up government funds to be made available for other government spending priorities e.g. benefits, healthcare, etc) was too powerful a fiscal factor, or the geopolitical tea-leaves were misread, or the potential threat was simply ignored as both inconvenient and improbable, the result was the same.

There is no need to re-hash the full history. The culmination of Russia’s paranoia with the increasing encroachment of both the EU (what Putin sees as a voracious but decadent and subversive bloc being a direct threat to ‘Russian values’ and the Russian way of life, i.e. a threat to Putin’s autocracy and the powerful supportive self-interests of the oligarchy and the kleptocracy) and NATO having significantly longer direct borders with Russia and its proxy Belarus (i.e. at the time, the Baltic States and Poland joining that of Norway) allied to Putin’s nationalistic desire to regain what he regards as always having been sovereign territory, led directly to his 2014 annexation of Crimea and the 2022 full invasion of Ukraine. Even if not recounting the history of Ukraine’s ‘threat’ to Russian sovereignty as perceived in Moscow, today there are startling parallels with emerging dynamics in Georgia and Moldova, each with its own domestic internecine political struggles about future membership of the EU and NATO.

Donald Trump wants a quick deal with Putin to end the carnage (more pragmatically, to get the US taxpayer off the hook). It may not be as simple as that. Zelensky will be encouraged or forced to accept partition but that does not preclude a continuing civil war in the Donbas and Crimea. NATO allies (especially the UK as a guarantor of the Budapest Memorandum) will almost certainly have to commit to substantial garrison/peace-keeping forces to be kept in Ukraine for the foreseeable future potentially splitting existing NATO operational formations. The big sticking points for both Putin and the European members of NATO are going to be over reparations from Russia, who foots the huge bill for rebuilding the country, what happens to the $320 billion of frozen Russian assets and finally, the indictment against Putin on charges of war crimes and genocide which he will demand are lifted.

Clearly much depends on the outcome of the Ukrainian conflict as to what Russia does next. Putin’s strategic aim is still to create a discernible politically and militarily sterile buffer zone between the EU and the Russian motherland (it was his demand before 2022 that all NATO foreign ‘trigger troops’ hosted by any NATO country on the Russian Federation western boundary should be removed).  In the event of what will be spun by Putin as a Russian ‘victory’ in Ukraine brought about by a Trumpian deal, will Putin next risk a head-on clash with NATO by attacking one of the several adjacent NATO frontier states? An attack could be through the Polish Corridor, or a right hook around the northern flank against the Nordic countries (a new calculation for Putin, or more accurately a miscalculation by him, now that Finland and Sweden have foregone their neutrality in favour of NATO membership; NATO planners had always assumed that he would not think twice about violating their neutrality if it suited him, but today an attack against either Sweden or Finland would explicitly trigger an Article 5 response by NATO). Or will he isolate the Baltic States by sending troops from Belarus through the Suwalki Gap separating Poland and Lithuania and linking with the Russian nuclear-armed oblast enclave of Kaliningrad on the Baltic Coast? He could then resort to tried and tested Trojan Horse techniques using ethnic Russian populations in the three Baltic States to destabilise their governments from within and either directly appropriate or seek to control territory under the disguise of having a democratic mandate through ‘referenda’, as practised in the Donbas oblasts of south-east Ukraine? Moldova and Georgia are obvious targets: both are potential thorns to Putin but neither is a NATO member; on a smaller scale and with the experience of NATO’s limitations and weariness with Ukraine behind him, ‘reclaiming’ either country or both would be a logical next step.

The most immediate risk is that if Trump’s peace talks fail and against advice he still withdraws all military funding from Ukraine, Ukrainian resistance is likely to fail, probably quickly. While NATO’s arsenals are largely empty and its immediate resilience is low, is that the time that Putin might rapidly switch fronts and spring an attack elsewhere on another country? If there is one thing which keeps NATO’s Supreme Allied Commander Europe awake at night, it is that “World War Three tonight” scenario.

Biden, Boris and the rest of NATO had it in mind that sanctions would take Russia out of the game; by now, to use their phraseology, economically it should be ‘on its knees’. It most certainly is not. It has suffered staggering losses and shed much blood and treasure and failed to conquer Ukraine (Ukrainian resistance and resilience have been amazing and inspirational). But Russia’s economic reserves remain largely intact, as do its sources of foreign income. Those who predicted Putin’s overthrow have been proved wrong; he is still firmly in command. Putin has the economy on a war footing and in 2025 will spend $132 billion on defence and security, 6.3% of GDP, 40% of total government expenditure and a 25% increase on 2024. Similar to China, it is dangerous to equate Russian purchasing power with that of the West (defence dollars buy more in China and Russia thanks to lower procurement costs and wages). It is also a dangerous assumption that because Russia has suffered so heavily in Ukraine it will be incapable of any similar venture. Betting against Putin has been expensive before and the odds are it will be again.  

China: a Tier 1 threat to national security

If the threat from Russia is overtly offensive by whatever means, that posed by China is more subtle and subversive but no less pernicious and (as assessed by MI6 in a foreign perspective and MI5 domestically) at least as dangerous.

US National Security Agency senior adviser Rob Joyce coined the memorable phrase “Russia is the storm; China is climate change”. China’s strategic aim is to lead a new world order (i.e. with China at the apex and everyone else a vassal, subservient or deferential); it is an explicit objective set out in Chinese Communist Party (CCP) literature. The terrestrial One Belt One Road and maritime String of Pearls infrastructure projects are designed to give China global leadership and to confer global strategic patronage on Beijing. The strategy is prosecuted through carefully planned economic support and investment extending not only across Asia and Europe but in Africa and Latin America. It is a well-planned programme of fiscal neo-colonialism which places ‘beneficiaries’ in the debt of the CCP. It is designed to give Beijing control (or at least significant influence) over natural resources, manufacturing, technology, infrastructure, trade routes and supply chains globally. In terms of its land strategy, Iran is key: blocking the entire land mass from the Gulf to the Caspian, Iran’s cooperation determines whether China’s New Silk Road is intercontinental or merely a pan-Asian cul-de-sac. These means of gaining advantage are backed up by significant military expenditure and innovation (as well as being a nuclear power, China now has the world’s biggest navy and is recognised as being a generation ahead of the West in the development and deployment of hypersonic missile technology).

The direct military threat from China currently focuses on Taiwan and the China Sea. Chinese forces are instructed to be prepared to invade Taiwan no later than 2027. The consequences of China gaining control of Taiwan are significant globally: Taiwan accounts for 90% of all semi-conductor manufacturing capacity; were that capacity seized intact, China’s global industrial control would be obvious; were it to be destroyed as a means of Taiwan denying control to China, so ubiquitous is the use of such chips that global manufacturing could potentially quite literally grind to a halt. As well as developing the global String of Pearls, China has been actively appropriating disputed atolls in the South China Sea, including the Spratley Islands, the Paracels and recently, surveying the Scarborough Shoals; applying the adage of occupation being nine tenths of the law, to secure its new ‘possessions’ China quickly develops and militarises such reefs and atolls including equipping them with airfields and missile batteries.

Iran: do its strategic miscalculations with Israel make it less of a threat or more dangerous?

To date, Iran’s offensive stance has been oblique more than direct. Its funding, arming and direction of a number of proxy non-state organisations (many but not all of which have been proscribed by several but not all western governments as terrorist groups; Iran’s own Revolutionary Guard is one that has not been proscribed by the UK despite evidence of active subversion and alleged political assassination on British soil) has been its means of waging asymmetric warfare against its targets, the principal of which is Israel. Its hostility towards the United Sates is explicit, as it is to the UK by association. But as the late General Sir Mike Jackson, a former head of the Army, made clear, Iran’s use of force, even by proxy, is merely a means to an end, not the end itself. The end it wishes to achieve is the supremacy and imposition of Shia Islamic fundamentalism: until the West confronts the cause (Iran) rather than the symptoms (its proxies), it is chasing the wrong threat actor. John Bolton, a former US National Security Adviser and leading neo-con hawk, believes that a direct attack by the United States against Iran is both inevitable and warranted.

Western intelligence and defence agencies are trying to evaluate the effect on Iran of the collapse of the Assad regime in Syria. Optimists hope on top of the damage inflicted by Israel directly against Hezbollah and Hamas, Iran’s proxies, that no longer having a safe route through Syria to Lebanon to help re-build Hezbollah will significantly undermine Tehran’s ‘Ring of Fire’ around Israel; they see the regime in Tehran being thrown on the defensive potentially to the point of implosion. Pessimists worry that a deeply defensive regime in Tehran will react by lashing out across the region and accelerating its nuclear programme with the full intention of using it. 

North Korea: a mystery inside a riddle within an enigma

North Korea is as enigmatic as it is dangerous. An entirely closed state, North Korea is difficult for western intelligence agencies to penetrate and analyse. Pyongyang has consistently surprised western governments with how advanced and sophisticated its nuclear and missile programmes are. So advanced are they that they represent a credible threat not only to South Korea and Japan but also the western seaboard of the United States.

US Policy: Trump and trade

Much anxiety today arises from the risks posed by Trump’s programme of Make America Great Again and perceived US isolationism, particularly through his new trade war and his blanket tariffs on all US imports with special tariff premia levied on China, Denmark (over the ownership of Greenland), Panama (he wants the canal) and Canada (the “51^st State”). The actions against his allies are sure to be corrosive and unhelpful. Trump is no diplomat: he does not “do” partnerships, he trades and negotiates with counterparties for advantage; apart from President Macron of France no senior western leader is still in office who was there in Trump’s first term. They need to learn to deal with him all over again. But looking beyond, do not assume that the only concern is Trump. Joe Biden’s Inflation Reduction Act containing $340bn of environmental initiatives and tax incentives was just as nationalistic, protectionist and disruptive to global trade flows as anything Donald Trump will do with tariffs. It can all happen again in a different form under a future president.  

Known Unknowns: joining the dots

Nuclear & WMDs

The biggest of these is nuclear proliferation and other weapons of mass destruction (WMD). In the post- Second World War era of the Cold War, the established nuclear powers were the US, the USSR, the UK and France. They were joined by India, Pakistan and China. Israel has nuclear weapons though never publicly acknowledges it. North Korea now has a nuclear capability, and despite the JCPOA (Joint Comprehensive Plan of Action, the failed and discredited treaty designed to contain Iran’s nuclear capability) Tehran either already has it or is within reach of achieving it. South Korea has announced that it is actively investigating the pros and cons of a nuclear programme with which to deter Pyongyang. In the past, countries such as Egypt have actively pursued nuclear weapons programmes but abandoned them. Libya under Gaddafi had an extensive arsenal of WMDs (including a nascent nuclear programme) which he was persuaded to give up in return for being no longer treated as a pariah and sanctions being lifted. Ukraine surrendered all the old Soviet nuclear weapons on its territory in return for security guarantees and that weasel word ‘assurances’ (the infamous 1994 Budapest Memorandum of which the guarantors were the US, the UK and Russia whose guarantees and ‘assurances’, in the event, amounted to being as worthless as a tin of beans; make no mistake, failure to honour the sovereignty guarantee is a massive policy failure on the part of the US and UK governments). The future risk is not only which countries might harbour the ambition of a full nuclear capability but those including rogue non-state players who might develop ‘dirty’ weapons, in the case of nuclear not to create an explosion but to spread toxic nuclear material far and wide, or other forms of crude chemical and biological weapons for indiscriminate use against civilian populations.

Climate change

Climate change is a real threat. Foreign Secretary David Lammy said in an essay in September 2024 that it and loss of biodiversity are the greatest preoccupations of his department, they are ‘at the heart of everything the Foreign Office does.’ Dismissing the likes of Russia and China, he said that ‘climate change is a much greater threat than terrorism or an imperialist autocrat’.  There is merit in his argument about the pernicious effect of climate change (though while a threat for some, it represents an opportunity for others). But he misses the most fundamental point: if the threat from climate change is as he describes it ‘pernicious’, the threat from climate change politics is far-reaching, immediate and direct. It is far from being about kumbaya and the universal fight against global warming. The race to achieve carbon net-zero, and in particular what I have termed in the past as the great ‘Climate Change Compression and Competition period’ over the next 10-15 years represents the third in a series of immense shifts in geopolitical influence and power since the industrial revolution in the 18^th century: first the exploitation of coal to transform fledgling technologies through to full-scale industrialisation; next, the second phase comprising the primacy of oil and the transformative nature of internal combustion and jet engines; and now embarking on the third which is the exploitation of rare earth elements, ores and minerals including lithium, copper, nickel and cobalt for new forms of motive power in the post-hydrocarbon era; this exploitation extends to the sea-bed and especially where the earth’s tectonic plates meet and immense natural forces drive such elements and ores close to the surface of the earth’s crust.

The Paris Climate Accord fired the starting gun for what will be a tremendous tension between international cooperation on the one hand and about securing national competitive advantage and asserting global geopolitical leverage on the other. Success equates to economic and geopolitical ascendancy; failure to capitalise condemns losing countries to relative decline and weakness. China is exploiting the new paradigm ruthlessly. One small but clear example is already evident as it ‘weaponizes’ the development and sale of heavily subsidised electric vehicles to western markets with two aims in mind: 1) commercially targeting consumers in countries such as Germany with cars at price points no western manufacturer can possibly match and by undercutting them so significantly that it undermines key national industries and sows economic and social instability (consider the extent to which the intense pressure on VW’s fortunes in Germany are a national industrial disaster and are sure to be a factor in the February 2025 Federal election) and 2) to gather vast quantities of consumer data for intelligence purposes; the western response is tariffs.

US oil combined with natural enterprise and innovation conferred global industrial leadership on America. The principal global reserve currency is the US dollar whose hegemon was underpinned by oil: the ‘petrodollar’. China, aided by Russia and Saudi, are intent over time on breaking the supremacy of the petrodollar as part of a long-term strategic plan to undermine the US economy. Who knows if it will succeed, but the intent is there. Another potential shift in the global geopolitical tectonic plates which will have security consequences as the global balance of power shifts.

The Global South

Linked to this through the BRICS (originally Brazil, Russia, India, China and South Africa) economies is the challenge to the status quo from what is loosely termed the ‘Global South’. India’s Prime Minister Modi threw down the gauntlet at the G20 conference he hosted in September 2023. This expanding group of countries rejects the historic western hegemony over the established global institutions: the United Nations; the World Bank; the International Monetary Fund; the World Health Organisation and others. The decadent West is the Past, the dynamic Global South is the Future. The geopolitical tectonic plates are shifting; shift creates stresses and tensions; when the stress is too great, the resulting seismic release can be destructive. When and to what extent, nobody knows but that the plates are on the move is self-evident.

The shifting sands of western politics

There are western-based risks too. Exploiting the malleability of the public, manipulation through social media is a clear challenge to political norms, as is the rising influence of those individuals and corporations who own media channels (if Russia has its oligarchs, the US equivalent is the media mogul). Across Europe and in the US, there is a demonstrable rise in populism (both right and left) challenging the status quo. Electoral and political outcomes are less easy to predict. Resentment against the ‘establishment’ and the perceived democratic deficit, a breakdown of trust in politics, the increasing economic and social divide between the ‘haves and the have-nots’, immigration, climate change politics, all are contributing towards instability and reactivity making firm transnational strategic policy for organisations such as NATO more difficult to achieve and sustain.

Global Institutions

The cynical manipulation of and disregard for the Rules Based Order is already happening. Two shining examples demonstrate how structures and protocols put in place with the very best of intentions to maintain global security and integrity for the protection and safety of civilians have been systematically exploited. The first is the United Nations: how can it be that of the five permanent members of the Security Council, one, Russia, is still allowed to sit, vote and veto, aided and abetted by another, China? Russia has illegally invaded a sovereign nation and fellow UN member (Ukraine, with security guarantees and ‘assurances’ provided by two other permanent members, the US and the UK, lest it be forgotten) and its president has been indicted on charges of genocide and war crimes and yet the UN is powerless to hold Putin or Russia to account or to prevent his ambassador from being present. The UN has also managed to tie itself in knots over Israel: despite facing literally an existential threat in the form of extirpation and obliteration by Iran, and defending itself and its people robustly, Israel emerges as the pariah of the United Nations. Which leads directly to the second, the International Criminal Court which as well as indicting Hamas leaders has also indicted the prime minister and the former defence minister of Israel on charges of genocide and war crimes (charges endorsed by the new Labour government). It was Lord Sumption, a former member of the Supreme Court in the UK, who said ‘we judge our friends by higher standards’ in the context of Israel. 600 British lawyers and academics demanded and eventually secured the suspension of British military aid to Israel on the grounds that the contravention of Palestinian human rights in Gaza caused by Israel’s response to the unprovoked Hamas attack of October 2023 rendered such assistance illegal. That Hamas has no regard for the lives of its people and uses them cynically as a human shield is irrelevant. Whatever your views on the long-running Israeli-Palestinian conflict, who is right and who is wrong, is not the point. It is the precedent that in the event of an unprovoked attack by an unprincipled actor with no regard for international law, you are expected to behave at all times with dignity and decorum and to abide unconditionally by that law. Otherwise you will find yourself arraigned in the International Criminal Court on criminal charges. Turn up to a knife fight with a Tommy gun and you’re in trouble; come with boxing gloves and a copy of the Marquis of Queensberry rules and the lawyers will let you pass.

Painful to say but it appears increasingly the case that malign actors regard such institutions as either toothless tigers or, cynically, little more than useful idiots.

Unknown unknowns: who knows?

By definition a very short section! With the benefit of hindsight, a good example would be the rapid collapse of the Assad regime in Syria seemingly out of nowhere. Stretching credibility, Joe Biden claims direct credit through his support for Israel. The reality is that nobody saw it coming, let alone predicted when and with what spontaneity it would happen. Now that it has, however, what happens next in this highly febrile region, with a conflict that already encompasses countries at the nodal point of three continents, becomes a ‘known unknown’. Policymakers are rapidly recalculating, using probability trees to second guess the outcome and trying to effect stability. The key questions are what are the responses of the regional players who variously have the most to gain (Turkey, Israel) or the most to lose (Russia, Iran) or who are stuck in the middle (Lebanon, Jordan, Iraq) while former members of a proscribed transnational terrorist organisation (ISIS/L) attempt to form and maintain a stable government in a deeply divided sovereign nation?

Could a threat be found in central Asia if competitive tensions begin to rise between future Chinese and Russian leaders? Stuffed full of natural resources and with a northern coastline edging what in future years is likely to be an ice-free Northwest Passage (cutting many days off the global shipping transit times between the major Pacific and Atlantic ports), China undoubtedly harbours ambitions for self-sufficiency in raw materials including oil and gas by controlling Siberia in the event of a break-up of the Russian Federation. Trump’s ambition to control Greenland is no different.

I have referred to non-state players: will future threats to stability come from potentially resurgent organisations such as Al Qaeda, Daesh, Boko Haram and others? What about transnational coalitions such as ISIL and the Caliphate? What about entirely new organisations? HTS, the Sunni organisation that has recently overthrown Assad in Syria seems to have been a little known or misunderstood quantity which caught western intelligence agencies and their governments on the hop and yet is now forming a government in one of the most politically charged places on the planet.

Listen to Part 4

Part 4: Auditing The British Armed Forces: Big Brain, Limited Brawn

The UK’s armed forces are regarded as among the most professional and best led in the world. The recognition of this is in NATO’s European command structure: the Supreme Allied Commander Europe, SACEUR, is always an American appointment; SACEUR’s deputy (DSACEUR) is always British and the Chief of Staff position is reserved for a German appointment. Leadership of NATO’s Allied Rapid Reaction Corps (ARRC) is a UK military 3-Star lieutenant-general’s post. Post Cold War military experience (Gulf Wars, Balkans, Afghanistan, anti-Houthi operations etc) says that where others might hesitate to tread, or prevaricate or prefer to opt out of participating in conflict zones, British forces have few such qualms. They are considered and measured and certainly not gung-ho but the default military attitude applicable to political instructions and following the relevant discussions and offering opinions on risks and the art of the possible, is usually that of a confident ’can do’ rather than ‘can’t’, even less so ‘won’t’. The exemplar was the recovery of the Falklands in 1982 (today, such is the dysfunction of the Royal Navy as explained below, a unilateral repetition of the Falklands recovery would be a military impossibility).

Leadership and expertise are not in question. In most cases military capability is high. However, it is the means to deliver and sustain that capability which is sorely lacking. The UK’s armed forces are too small to deliver critical mass. They are also so out of balance that not only are there deficits in capacity and sustainability but there are critical areas of our defences that are almost totally absent.

Technological development is essential in the defence sphere, the need to stay one step ahead of the opposition. As discussed in Part 5, defence technology is very expensive (even without the self-inflicted frictional costs arising out of inefficient procurement). There has been a tendency to use technology as a justification for reducing hardware and manpower. Spending on technology needs to be incremental to overall military capacity and capability, something that all too often gets lost in the execution.

To illustrate the numbers of full-time professionals in context: with 74,200 personnel, the entire British Army will fit into Wembley Stadium, still leaving 15,800 seats empty; 11,000 more people turn up to a Saturday match to watch Manchester United play football at Old Trafford than serve in the whole of the Royal Navy and the Royal Air Force combined. 170,000 more people work for Tesco (309,000 employees) in the UK than the total aggregate number of Regulars serving in the three armed services.

Royal Navy

The Navy holds our strategic deterrent. The nuclear capability allows the UK as a small country to punch above its weight on the global stage. Our nuclear force is integral to the endurance of our permanent seat on the United Nations Security Council and maintaining our leadership in NATO, second only to the US. Our strategic nuclear capability is entirely invested in the Trident submarine fleet (SSBN-- Ship Submersible Ballistic Nuclear: Vanguard Class British-built boats, US sourced missiles and command and control systems). We have a total stockpile of 225 warheads which in Boris Johnson’s 2021 Integrated Review was planned to be increased to 260 (the 2010 SDSR previously mandated a maximum of 180 warheads). It is a substantial capacity, enough to lay waste to a continent, on which basis it commands respect. In context, however, 260 warheads would still rank us with the fewest of the recognised nuclear-armed states, though as a 2024 House of Commons briefing note says, of those countries only the UK and China are actively increasing their arsenals. Trident is ageing and will need replacing in the next 10 years. The decommissioning costs will be substantial.

Where have all our ships gone? Anyone seen them?

Beyond Trident, the Navy’s ability to create force generation is significantly compromised. It finds itself locked in a doom-loop: its manning and fitness crisis is so acute that its ability to put what few ships remain to sea is critically undermined. Potential recruits of the right calibre perceive the chances of going to sea (surely the whole point of being a sailor) as diminishing, so why bother? Of those who do apply, more than half give up because the admissions process is so laboured, inefficient and absurdly long. On the other hand, the accelerating operational strain is felt by those who remain in service and are left to plug the gap. They find themselves away from home more often and for longer than anticipated, eventually succumbing to operational fatigue and family pressure; they end up leaving in increasing numbers. The net outcome is the Navy finds itself struggling to recruit/admit people in the numbers it needs and failing to retain the experienced, trained personnel it cannot afford to lose. As a result, more ships are mothballed or decommissioned early, the fleet shrinks and it becomes a race to the bottom.

Apart from Trident, for the past two decades the defence budget has been dominated by the commissioning of two fleet aircraft carriers, HMS Queen Elizabeth and Prince of Wales and their aircraft. The planning, design and delivery of the carrier programme is an object lesson in how not to procure a major capital project. Straddling two governments headed respectively by Gordon Brown and David Cameron and in the aftermath of the Global Financial Crisis, well into the design phase the back-and-forth cost-saving discussions were prolonged even at the most basic level: one ship or two; catapult launch and arrester wire recovery systems (‘Cat & Trap’) giving fuller flexibility to what could fly on and off, or ski-jump decks and the restriction to V/STOL aircraft only; whether to be able to fit Cat & Trap retrospectively; all conspired to add billions to the cost and years to the delivery date. Undermining the strategic rationale, it left so little in the kitty that we could no longer afford to buy the full complement of American-sourced F-35B Lightning II V/STOL aircraft for which fixed-wing type (they also carry helicopters) the platforms were eventually exclusively specified. Lack of funds also precluded the building of new, specialist Fleet Auxiliary logistics capacity to keep the carriers replenished at sea and to prolong their operating endurance away from port. These two warships were designed to project real strategic power in the UK national interest, on a smaller scale but in a similar vein to the visibly imposing American carrier strike groups; the reality is that a lack of political understanding, budgetary constraints, abysmal planning and woeful execution (not to mention poor engineering resulting in relatively new ships with short sea times to date having an alarming propensity to break down at the most inconvenient of times) have left a diminished force. They almost have to participate in multi-national task forces (even if as the flag ship) because other than for peacetime Union Jack flag-waving sorties, they are too vulnerable to operate independently. 

In 2010, it was recognised that 19 frigates and destroyers (anti-submarine and anti-air defence ships) were the absolute minimum for the Navy to meet its operational needs. By the end of 2024 thanks to subsequent budget cuts and two more Type 23 frigates, HMS Argyll and Westminster, being mothballed for lack of crews and the latest casualty the Type 23 HMS Northumberland being deemed an economic write-off after damage, we are down to 14. At any one time, there may be a third of those ships in dock for servicing (the newer Daring Class ships are well-known to be high maintenance). In context, at the end of the Cold War, the most recent time of comparable threat, there were 46 such warships (and even that was four short of what was deemed the then minimum); nearly a decade after the Cold War ended and a much more benign environment than either during the Cold War or facing us today, the 1998 SDR insisted that a minimum of 38 escort and protective picket warships was needed; we have barely a third of that number to face a threat that has not only multiplied but crystallised.

Of the Royal Navy’s only other major surface assets, it has (more accurately had) two landing ships for amphibious operations with the Royal Marines. HMS Albion has remained operational while Bulwark was another which was mothballed long-term (officially ‘held on extended readiness, only to be deployed if required but capable of being regenerated’). John Healey has just announced that both will be scrapped. Any future amphibious operations will only be able to be undertaken courtesy of another country’s landing ships. Unilateral operations will no longer be possible until mooted replacements (the futuristic Multi-Role Support Ship programme) arrive in the late 2030s.

The Royal Navy has five relatively new Astute Class boats and one remaining old Trafalgar Class nuclear-powered hunter-killer fleet submarine (SSN: Ship Submersible Nuclear), to be joined by a sixth Astute Class sub currently under construction. These are powerful assets with high endurance and are core to what is referred to as Blue Water strategic operations.

Barely able to achieve the minimum

A 2024 analysis by the think tank The Council on Geostrategy (CoG) argues powerfully for a significant increase in British naval resources. CoG identifies three conceptual levels of naval force generation:

‘Sea Denial’: the most basic where the principal goal of a weaker force (e.g. ours) is to deny others (the enemy) the ability to act with impunity.

The author’s own interpretation of Sea Denial is that it is the minimum defence requirement for UK home waters including the North Sea, the North Atlantic (extending out beyond the west of Ireland and northwards to cover the Denmark Strait between Greenland and Iceland and to the south of that, the Iceland-Faeroes gap), the Channel and the Western Approaches (extending south-west into the Atlantic from Ushant on the Brest Peninsula and beyond the south-west tip of Ireland). That is a massive area of ocean but the need is to protect particularly against all forms of blockade which today includes not only sea lanes and the merchant shipping bringing in vital imports, but also the web of sub-sea cables that literally power our 21st century society. These include electricity cables from France, Holland, Denmark and Morocco (there is a plan to pipe solar electricity all the way up past the Iberian peninsula through the Bay of Biscay to Devon), and the trans-Atlantic cables linking UK internet providers with the US data centres where most of the ‘cloud’ is located. Inshore coastal waters now host the bulk of the UK renewable energy fleet of wind turbines all of which also need close protection (as a matter of self-defence, the Swedish government has just refused any further windfarm developments in the Baltic because they are deemed too vulnerable to disruption and destruction by the Russians, while they are difficult to guard).

As CoG goes on to note, Sea Denial may be pursued as a policy outside waters of direct domestic geographic interest; here for example would include the AUKUS tripartite pact between the US, the UK and Australia focusing our joint interests on the Indo-Pacific region and must include ‘sea denial’ to combat the growing influence of the Chinese navy, or the Red Sea and the Gulf of Aden against Iranian-backed proxy forces such as The Houthis and other non-state organisations with a propensity to piracy.

‘Sea Control’: the aim here is that a navy aims to control the seascape of specific national interest through having a permanent presence in strength such that it deters rivals and forces them to keep away. As CoG says, this may include coalition forces for the same purpose but control dictates that you are in command.

‘Command of the Ocean’: which CoG defines as regional, hemispheric or global dominance. While always able to be challenged, it was the position of the Royal Navy for two centuries based on a network of strategic global bases allied with large numbers of competitive, powerful vessels including capital ships (battleships and carriers), cruisers and submarines to sink enemy merchant ships, and fast destroyers for escort and protection. While maritime in focus, ‘Command of the Ocean’ shapes terrestrial geopolitical outcomes.

Today, to the extent any individual nation exercises ‘Command of the Ocean’ it would be the United States. However, that supremacy is being rapidly challenged by China. As discussed above, China’s maritime ‘String of Pearls’ strategy is the modern equivalent of the 19^th Century ‘Rule Britannia’: exercising a combination of global control, influence and reach through strategic port installations and investments, it also focuses on the key global maritime pinch points (Straits of Malacca, Gibraltar and Hormuz, the Bab El Mandab and Bering Straits, the Panama and Suez Canals), and its aim to control sea lanes (including a potentially ice-free Northwest Passage) and routes to market. Not only does China now have the biggest navy by number of hulls, but according to CoG the average size of its ships has also increased 10-fold over 40 years to 5000 tons/unit as it has developed from essentially a coastal force to having full Blue Water capability; more serious than that, China’s technological advance means that its navy is as competitive as virtually anything the West can field. Crucially, it is at least one generation ahead of the Americans in having fully operational cruise and ballistic hypersonic missiles (currently almost impossible to destroy once launched—the key is to prevent them being launched in the first place) which potentially render the US carrier fleet (and our own for that matter) obsolete if not irrelevant. 

The Royal Navy retains its strategic Blue Water go-anywhere mentality. However, it has not had the capacity to ‘Command the Ocean’ for nearly a century, nor does it exercise ‘sea control’. It would be stretching a point to claim that as a conventional naval force (i.e. ignoring Trident and the nuclear deterrent), it has the capacity to exercise ‘sea denial’; even if it can satisfy this most basic of criteria with the few assets it has available of which arguably the six SSN hunter-killer submarines are now much the most important element, it cannot sustain any significant losses without losing operational capability.

With so few surface fighting ships (and here I am excluding the small coastal patrol vessels and minesweepers), it finds itself in an unenviable position: however professional and warrior minded its leadership, pragmatically it becomes increasingly difficult to put major assets in harm’s way for fear of losing them and not being able to replace them quickly. The calculation is easy: if you have a total force of 50 frigates and destroyers available to begin with in a full state-on-state conflict and you lose, say, five, you’ve lost 10% of your force; if you begin with 15 and you still lose five, you’ve just lost a third (in context, in 1982 over the two months of the Falklands fighting, the Royal Navy lost four sunk of a deployed force of 24 frigates and destroyers with a further seven incurring major damage). Fewer numbers limit the ability to operate independently and forces you to pool resources with others with the increasing likelihood either of command frictions and/or loss of control.

Replacements: in need of a telescope, so far off are they

The 40-year-old Type 23 Duke Class frigates are due for replacement by the new Type 26 City Class warships later this decade (built by BAe Systems, HMS Glasgow will be the first due in 2028 for a ship whose keel was laid in 2017, a 30-year gestation period in a programme which began planning in 1998 as the Future Surface Combatant; Glasgow was supposed to have been fully commissioned for operational service no later than 2023). They will be supported by the five new smaller general purpose Type 31e ships being build by Babcock, the first of which was supposed to have been delivered in 2023: it is hoped that the programme will be complete by the end of the decade.

In 2023, the new Type 83 ‘Future Air Dominance System’ Destroyer programme was announced, with the intention of replacing the current Type 45 Daring Class ships. Type 83 was described by the then Chief of the Defence Staff Sir Nick Carter as ‘the only credible air defence capability against cruise, ballistic and hypersonic missile attack’. Type 83 is planned to enter service from 2038 when the Daring ships are retired; realistically, unless procurement changes significantly any delivery before the mid-2040s will be a miracle.

Technologically advanced systems such as Type 83 deliver capability. But numbers create capacity and operational sustainability. ‘Increased Lethality’ is the new MoD watchword applicable to all three services. Essentially it counts on the sophistication of your own kit being able to kill multiples of the enemy compared with his own ability to inflict casualties on you. The new programmes described above might be more capable than their predecessors but the basic thinking for new ships is a one-for-one replacement with improved lethality; it is not expansionary and geared to the threat and need. The essential fiscal train of thought for the Treasury is that if you have double the lethality, you only need half the number of units (even if each is more expensive) to deliver the same killing power. It might be a seductive argument in peacetime but with the losses that are inevitable it is dangerous fool’s gold in wartime.

Summary

In summary, the Royal Navy is paradoxically immensely strong and catastrophically weak. But the harsh reality is that when the strategic deterrent is taken out of the equation (on the basis that you hope never to use it), the Navy’s conventional capability is so diminished that going into 2025 the Senior Service is barely fit for purpose. It will be stronger by the end of the decade and going into the early 2030s. But in numbers, the all-important destroyer and frigate fleet will still be substantially below the threshold of need and resilience for the foreseeable future, even for ‘sea denial’, the most basic requirement.   

The Army

With a current full-time roll-call of 74,000 professional soldiers, the British Army is several thousand personnel short of its nominal establishment. The working assumption is that a new base-line establishment will be fixed at the current manpower roll-call; unless the recruitment and retention crisis is fixed, the result in time would be an army with fewer than 70,000 soldiers. As part of the Army 2020 programme in which regular numbers were cut on the understanding that there would be a significant increase in volunteer reservists with a minimum requirement of 30,000, today at 25,800, they are 14% undermanned and have the lowest establishment since early 2014.

Less an army than two-thirds of a corps

Its fighting capacity is structured around two manoeuvre formations, and some specialist units:

1. 1^st Division: (Global Response). 1 Div is the army’s light division, designed to be versatile, flexible and rapidly deployable. As of July 2024, it is the lead land formation in NATO’s Allied Response Force. It is quite used to being sent anywhere at any time in various configurations, for example it was elements of 1 Div’s 16 Air Assault Brigade which rapidly deployed to Afghanistan in August 2021 in Operation Pitting to evacuate civilians from Kabul airport. In the event of a Russian attack on central Europe, 1 Div will be rapidly deployed along with other NATO light troops to attempt to stabilise the front until 3^rd Division arrives.
2. 3^rd Division (Warfighting): 3 Div is the UK’s warfighting division. If 1 Div’s job is rapidly to stabilise the front, 3 Div’s is to bring heavier firepower to repulse and defeat the enemy. In a full-scale NATO operational setting 3 Div is part of the US Army’s III (3^rd) Armoured Corps comprising UK 3 Div, US 1^st Cavalry and US 1^st Armored divisions. 3 Div regularly participates in the War Fighter exercises in which the whole Corps command down to divisional and brigade level, including the British leadership contingent, are tested under a Mission Command Training Programme to simulate different scenarios of an all-out war in Europe.
3. Other: among numerous other capabilities (signals, medical services, intelligence, cyber, Commando gunners etc), including overseas detachments in Cyprus, the Falklands and training teams working with global partners, three other principal Army combat groups are available: UK Special Forces (Special Air Service Regiment, Special Reconnaissance Regiment, Pathfinders etc); the four battalions which comprise the relatively new Ranger Regiment (each Ranger battalion was formerly a standard, line infantry battalion which was re-purposed); and the 4,000-strong Brigade of Gurkhas, part-funded by the Sultan of Brunei. The Rangers and Gurkhas are available to deploy overseas to assist other nations’ forces, particularly with training but also being ready to take part in local operations.

Old Mother Hubbard

The Army is highly professional and very versatile. However, there are three significant, critical and potentially fatal shortcomings. 1) as the Americans have been complaining for some years now, the British Army is simply too small. Officially downgraded from a Tier 1 force to Tier 2, from an army to a militia, it cannot be relied upon to bring critical mass to the battlefield (and that is in the existing multi-national framework, without even thinking about the UK being self-reliant); if it is short of 8,000 personnel against its current nominal establishment, the harsh reality is that even if it were fully manned it is still at least a manoeuvre (fighting) division short of the minimum it should be supplying to NATO, and it is a whole corps (three manoeuvre divisions, plus supporting units and facilities) short of being a self-reliant fighting force. Why the need for self-reliance? Simply, if NATO splinters under pressure and member states become overwhelmingly preoccupied with their own national problems to the exclusion of their partners’ (as happened when the western front collapsed in May 1940 in Europe faced with the German Blitzkrieg), the British Army needs the means to be able to fight its own way out of trouble to live to fight another day. Were the wheels to come off properly and the UK was faced with invasion, by definition there would be nobody else to help us but ourselves.  2) the fatal shortcoming: an acute, immediate capability and capacity problem is that its ready-use ammunition locker is almost empty thanks to our generous donations of missiles and artillery shells to Ukraine and the difficulty of replacing them (consider the analogy of a retailer: everything the Army has is on show in the shop window; inside the shop, the shelves are spread thin with goods and there are substantial gaps; the stock-room at the back is entirely bare and the supply chain has no capacity quickly to provide replacements). It is estimated that at least £30 billion of missiles and shells supplied by NATO have been shot away in Ukraine in the three years since the conflict began. 3) largely dismantled in Options for Change, drawing on reservists working in the NHS the British Army’s medical units coped magnificently providing intensive care in operational theatres of war with low casualty rates such as Afghanistan; however, they have no capacity to deal with extensive high-intensity battlefield conditions in which there may be potentially hundreds of casualties per day; addressing this needs to be a forethought, leaving it as an afterthought will be a major problem operationally and politically.

Lethality?

Chief of the General Staff, Sir Roly Walker, with relatively small forces at his disposal, has made the case that the Army needs to focus on maximising ‘lethality’. Walker’s thesis can be condensed to the following blunt truism: to survive, let alone win, our soldiers must kill multiples of the enemy’s soldiers before they kill ours. His aim is to double its lethality in a couple of years and to treble it by 2030. The British Army is highly versatile and flexible. But it is largely purposed according to the 2010 SDSR (since when its establishment has been cut by a quarter), mainly for small, light, out of area (OOA) operations and specifically not for a mass, head-on, state-on-state war in Europe. As for ‘lethality’, from 2025, the British infantry cadre will abandon its four-decade experience with armoured infantry and revert entirely to the light role of history. It will lose significant lethality. Why? Because in retiring the venerable, tracked Warrior Infantry Fighting Vehicle (equipped with a turret sporting a 30mm high-velocity, quick-firing cannon which was due to be upgraded to 40mm and capable of firing accurately on the move) and replacing it with the eight-wheeled Boxer Armoured Personnel Carrier (no turret, merely a single 7.62mm rifle-calibre machine gun mounted up top), the Armoured Infantry battalions which currently work hand-in-glove with the Challenger heavy tanks and bring offensive firepower in their own right, will no longer be able to provide that. Boxer might have been suitable for low-intensity OOA operations but it is the wrong universal solution for combating the heavy conventional forces we face today. To the Americans’ critique, not only do we not bring critical mass in terms of numbers, soon we will also be bringing less firepower (i.e. lethality) per capita to the party as well. Military internet forums suggest potential constraints with Boxer in the infantry anti-tank role compared with Warrior, however as suggested by on-line magazine ‘Army Technology’ these could be ameliorated by the development of a Boxer variant that includes the ability to fire Javelin anti-tank missiles from ‘under armour’. There are off-the-shelf alternatives to Warrior, notably the US Bradley Fighting Vehicle, or almost identikit to Warrior (but at least a generation newer) is the Swedish Stridsfordon CV90 combat vehicle.

Lord McCaulay said in 1831, ‘the essence of war is violence and moderation in war is imbecility’. This latest ‘development’ in infantry thinking and equipment knowingly reduces the ability to rain down violence on the enemy. The logical implication is pregnant with regard to Boxer. Boxer is a programme which the UK MoD has been obsessively and myopically involved with on a love-in-love-lost basis since 1996 (yes, as a first time purchase we really are buying a platform which is already 30 years old). It has been nearly three decades in the gestation: five governments (including the Coalition), nine prime ministers, 15 defence secretaries and 11 Chiefs of the General Staff for the delivery of what is in essence a lightly armoured bus and still with not a single vehicle in operational service. If you want a metaphor for everything that is wrong with defence procurement and decision-making, the definition of the ‘Future Soldier’ programme involving Boxer and Ajax (below) is it. It is lost in the mists of time as to whether ‘Future Soldier’ was the concept for which Boxer and Ajax were the solution, or whether they were the vehicles we decided to procure which then defined what the ‘Future Soldier’ was allowed to be. Either way, ploughing on regardless and ensuring that all infantry is designated as ‘light’, Boxer certainly is the wrong solution to the enemies who are likely to confront us for the foreseeable future.

One of the constant features of all the defence reviews since 1990 has been the inexorable reduction in heavy armour. According to Global Defence Technology as at the end of Q1 2024 the UK had 213 Challenger Main Battle Tanks at its disposal, 14 short of its listed inventory. It is still planned that 148 hulls will be upgraded by contractor Rheinmetall/BAe Systems to Challenger 3 specification with the remainder being phased out, reportedly either to be donated to Ukraine, sold to the Sultanate of Oman or kept in the UK for cannibalisation for spares for Challenger 3. We have 112 Regular tanks crews; adding in the reservist tank regiment, there will be no spare Challenger 3’s in the event of battle losses. Challenger 3 features the latest active armour to give greater survivability, and an upgraded 120mm main armament. But however good the improvements, the essential fact is that what we might call the ‘Heavy Brigade’ will see its fighting capacity shrink by a further 30% and with no resilience. In 1990 at the end of the Cold War, the UK had 1,200 Main Battle Tanks at its disposal. In the context of the war in Ukraine and the extent to which Main Battle Tank losses have been incurred by both sides, were we to suffer the same rate of tank casualties, our entire heavy armoured force would be destroyed in little more than a month. It is a very sobering thought.

More positively, and only seven years behind schedule, the first of the Army’s new Ajax light tanks (the replacement for Scorpion and Scimitar which were fully retired in 1994 and 2023 respectively) have been delivered. The medium cavalry regiments were supposed to be fully operational with Ajax early in 2020; full operability is now scheduled to be completed by October 2029, possibly a year earlier if some urgency is injected into the programme. Consistent with other major procurement programmes, serial faffing, changes of specification, contractor corporate M&A and bedevilled by technical problems with vibration and noise have all conspired to make this another two-decade delivery programme, nearly 100% longer than it should have taken. It will weigh in at £5.5 billion against the original budget approval of £3.5 billion. To this £5.5 billion must be added a further £430 million spent developing an uprated turret and bigger, better gun for Warrior, a programme aborted in June 2020 (that was when it was discovered that the aperture into which the rotating turret slots is of a different diameter depending on which production batch the vehicle was made in: it was found to be impossible to mass-produce one uniform 40mm turret, each would have to be tailor made; how that was only discovered at the end of the programme rather than at the outset is a mystery). In total, Ajax represents a 69% over-spend. 

Treasury maths: 2+2=3

The Ukrainian conflict has added a new dimension to our understanding of 21^st Century state-on-state warfare, notably the development and importance of drones, mines, electronic counter-measures, air defence and the vulnerability of armour to sophisticated anti-tank missiles such as Javelin and NLAW. There are significant divisions in defence circles as to whether Ukraine marks the end of the road for the Main Battle Tank, and indeed questions the need for as many soldiers as warfare becomes more reliant on artillery and ballistics in whatever guise (and lest we think otherwise, that is all a drone is: simply another means of delivering explosives; they are not new, indeed the Germans were the innovators in WW2 with such devices as the V-1 Doodlebug, radio-controlled anti-shipping glider bombs, and Gnats, or acoustic ‘circling torpedoes’). While tempting to the Treasury as a convenient exchange between relatively inexpensive, low-tech ordnance and expensive capital kit and soldiers which need paying, feeding, watering, accommodating and maintaining, Ukraine also reminds us that the ultimate game of state-on-state war is to gain or hold territory; high explosives can help blast the way there but only soldiers protected by armour can take and hold ground and consolidate a position. As both Russia and Ukraine draw in more manpower both to gain advantage and replace losses, it reminds us that such a conflict requires more people and more, better-protected armoured vehicles and tanks, not gambling with fewer of both.

We’re right behind you: a long way behind

Relying on both the RAF and the Royal Navy respectively for air cover and logistics, we have to remember one big difference between the Cold War when the battlefield was going to be in central Germany (down the old East German border with the West German republic) and potential operations today. In the Cold War, we had a standing garrison of 55,000 troops making up the British Army on the Rhine stationed in northern West Germany, on the spot, ready to go, in easy reach. At its peak, BAOR was a Corps comprising three fully-equipped armoured divisions, an infantry division and significant artillery strength. In 2025, our total warfighting capacity is one light and one medium all-arms division both based in the UK, not just 1000 miles from what will be the front line in Eastern Europe but separated from the Continent by the Channel and the North Sea. The latest pronouncement from the Secretary of State for Defence is therefore strategically illiterate (especially to save £500m when the Foreign Office is sanctioning £9bn as a payment to Mauritius to take the Chagos Islands, potentially giving China a direct watch on the UK/US base on Diego Garcia in the archipelago): immediately to scrap the two Royal Navy landing ships (with 10 years’ perfectly good service life remaining and leaving 3 Commando Brigade of the Royal Marines high and dry), plus two Royal Fleet Auxiliaries logistics ships. And having lost the entire fleet of 14 medium-lift RAF Hercules transports in 2023, to which add 14 Chinook heavy-lift helicopters and 17 smaller Pumas in Healey’s announcement, the ability quickly to get two divisions plus their kit to the front must be compromised (the Pumas might be ‘irrelevant’ in this context as Healey claimed, but it is as much about the optics of the totality of this decision and how it appears to our enemies, as it is about pragmatic fiscal frugality; it makes Healey appear hapless and unaware, especially that within less than a month of announcing the application of a cutter’s blowtorch to HMS Albion and Bulwark, the Chinese launched the world’s biggest amphibious assault ship). As was found in Afghanistan, air mobility for ground operations was constrained by the lack of Chinook helicopters; when the then defence chief, Sir Jock Stirrup, an airman, said that the UK could not afford the loss of a ‘single strategic helicopter’ (each can carry 55 troops, or carry 10 tons of underslung cargo), you have a fair notion that the ‘strategy’ is running on fumes.

A previous defence review places the logistics reliance on commandeering civilian shipping, much as happened very successfully in the Falklands in 1982. The differences between that very limited campaign, albeit one with a supply chain extending 8000 miles, and what might happen in a hot war in Europe are a) one of scale (shifting two divisions rather than one) and b) in a European context the entire logistics path, including UK embarkation ports, will be under direct threat from the enemy with the possibility of significant losses being incurred even before the troops reach the front line (after disembarkation, one of the major considerations of transporting two divisions across Europe, especially by road, is the strong likelihood of all routes being blocked with thousands of civilian refugees and their vehicles heading in the opposite direction fleeing from the battle front to safety; what do you do: be polite or shove them out of the way?). The loss of a big civilian ro-ro ferry with limited capacity to defend itself in the Channel or the North Sea carrying the best part of a brigade of troops and its vehicles would be a major blow.

Summary

In summary, the Army has great professionalism.  It has breadth but little depth. Its current capability is not just questionable but minimal while it is so chronically short of anti-tank missiles and artillery shells. It has limited capacity and no resilience. As for lethality, its current kit is good but it’s not so superior that it can in any way make up the shortfall in numbers of soldiers or fighting vehicles or ordnance that either provide critical mass or self-reliance; and that lethality is about to diminish as discussed above. “Hollowed out” is how immediate past head of the Army Sir Patrick Sanders described his former Service. It is difficult to disagree. 

Royal Air Force

The Royal Air Force was relieved of responsibility for the nuclear deterrent in the 1960s. Delivery by submarine is more secretive, secure and reliable than by aircraft. With the withdrawal from Germany completed on April Fool’s Day 1993 to home bases, retaining Akrotiri in Cyprus and Stanley in the Falklands as the only exclusively UK-owned-and-operated overseas fields and sharing facilities in Estonia and Rumania, on Ascension Island and Diego Garcia on NATO duties, today the RAF is a highly professional but small, limited tactical fighting force with integrated logistics and transport capability. The latter has limited capacity but global reach within the constraints of needing friendly, protected landing grounds and operational support.

Designed for war, configured for peace

For managerial efficiency the home-based RAF is structured in a peace-time configuration: the Typhoon fast jet air defence and strike force is concentrated exclusively on two airfields 400 miles apart at Coningsby in Lincolnshire and Lossiemouth in Morayshire in North-East Scotland (which also is the home of Poseidon maritime reconnaissance/submarine hunter aircraft); the F-35 Lightning II fast jet force (a joint force shared with the Navy) is at Marham in Norfolk; large helicopters fly from Odiham in Hampshire and smaller types from Benson in Oxfordshire; all RAF fixed-wing logistics, air-to-air refuelling tankers and transports are based at Brize Norton in Oxfordshire; intelligence gathering, drones and command & control aircraft operate from Waddington in Lincs.

Were the UK under direct attack, to undermine UK air defence and to prevent or disrupt interdiction aircraft taking off and landing an enemy would quickly target those three fast jet airfields in particular (none of the RAF’s other aircraft represents a defensive combat threat to an enemy). The F-35B variant of Lightning II operated by the British is the V/STOL version: it offers great versatility as to where it can operate from so long as the logistics are available, but the compromise is shorter combat duration and a reduced payload compared with the conventional take-off version. Operational resilience rather than managerial expediency says that combat capacity and survivability have a better chance of being maintained using the principle of dispersal to multiple airfields. As a back-up the RAF does have its own secondary alternatives (Cranwell, Wittering, Leeming, Honington) and in emergency can call up other MoD fields as necessary, though without the required operational infrastructure being immediately available (e.g. Fairford, Farnborough and Boscombe Down; the ex-RAF east coast stations at Cottesmore, Leuchars and Kinloss are also available with preserved emergency military grade runways despite currently being army barracks). There are also the US military fields at Lakenheath and Mildenhall in Suffolk. In extremis, in a major conflict with all civilian traffic closed, the RAF would presumably commandeer use of commercial airports. Dispersal adds greatly to security; to maintain operational capacity, however, it only works if spares, refuelling, engineering and the means of repairing and re-arming are readily available on satellite locations.

Combat capability is limited to two types only: fourth generation Eurofighter Typhoon (fourth generation describes types whose design origins are in the 1970s and were operational from the 1980s, typically moving from role-specific to multi-role capability and including advanced avionics such as head-up displays and fly-by-wire control systems); fifth generation technology, that evolved since the 1990s and introduced operationally in the US 2005, is provided by the Lockheed Martin F-35 aircraft dubbed Lightning II by the RAF (the major advances are in promoting survivability through stealth profiling, and also enhanced manoeuvrability through being deliberately almost entirely aerodynamically unstable, kept aloft by powerful jet engines and a battery of computers). Despite being a generation apart and Typhoon approaching obsolescence, these are both immensely capable aircraft, whether it be in the interdiction, strike, reconnaissance or (in the case of Lightning) intelligence gathering roles.

Fast jets are almost prohibitively expensive

It is that multi-role combat ability which is both their strength and their weakness. In producing an aircraft capable of all combat roles in a single airframe, the sophistication and breadth of technology that is packed into one design makes for a fantastically expensive programme. Batches are on limited production runs and scaling up production to replace operational losses or to undertake rapid force expansion is immensely difficult. It is hard for an outsider to get an accurate picture of the unit cost (with the added dimension and variability of currency exposure) but it is reasonable to glean from what is publicly available that both types cost upwards of £100m per air frame. The fiscal mind says that fewer very expensive multi-role aircraft can do the same job as a greater number of potentially cheaper single-purpose types at an overall lower cost. The flaw is that under complex potentially multi-geography operational conditions the same very expensive multi-role airframe cannot be in two or more places at the same time (i.e. the same airframe and its pilot cannot simultaneously be collecting intelligence over the Persian Gulf while engaged on interdiction operations over the UK and bombing ground targets in northern Russia). A Typhoon is not a Tardis.

The Few get fewer

Whether it be fast jets on operational deployment here in the UK, or small sub-flights in Estonia, Cyprus and the Falklands or (as not long ago) in Mali, or the heavy logistics aircraft engaged on the munitions and Ukrainian conscript-ferrying run to Poland or being used for humanitarian recovery (as was the case in Kabul and the Sudan), today’s RAF is already at full operational stretch. And that is without a full-scale war. When working with the army, a fresh blow on top of losing the immensely capable and durable Hercules fleet in 2023 (replaced by the Airbus A400M ‘Atlas’, greater in lift capacity but fewer in number and already earning a reputation for being very high maintenance compared with the ultra-reliable Hercules) is the recent announcement to retire the oldest 20% of the heavy-lift Chinook helicopter force and all of the ageing Puma fleet. Both will be replaced by newer types but there will be an interim capability gap of potentially at least two years. Further out but beginning in the Spring of 2025, the initial tranche of aircraft delivered comprising one third of the Typhoon force will be retired by 2028 leaving 107 operational airframes (thanks to operational stretch and high-G manoeuvring affecting both air frames and missiles, it is usual for up to a third to be in maintenance and therefore out of service: the RAF will be able to call on fewer than 70 at any one time); there are currently no plans either to replace them or to acquire more F-35s of which the UK has 33 operated jointly between the RAF and the Fleet Air Arm (note that the two aircraft carriers were intended to have a peacetime establishment of 24 F-35Bs each, rising to a maximum 36 in emergency i.e. a total of 76, excluding what the RAF might need them for when conducting non-carrier operations; we are reliant on the US Air Force or another country operating F-35Bs meeting the shortfall). Sixth generation technology will be provided by the proposed Global Combat Air Programme (dubbed ‘Tempest II’ by the RAF), a joint venture led by BAe Systems with Japan and Italy. Having been announced in 2022, and after some doubt, British participation was confirmed by the new government in the summer of 2024. Optimistically the first aircraft are due to enter service in 2035; given it is still a paper concept, unless there is a radically new approach to procurement, realistically if the first is in operational service by 2045 it will be a miracle.

Whether down to inflexibility, or bureaucracy or lack of resources, it is illustrative of the pressure under which the RAF finds itself (certainly compared with what will happen under full-theatre combat commitments in a head-on state-on-state war) that sustaining what are today comparatively low-intensity operations in the Baltic, the South Atlantic and the Middle East is immensely challenging. If the Air Force thinks it is stretched now, it is in for a profound shock if confronted with the real thing.

Summary

To summarise: the RAF has high capability, limited and reducing capacity and low resilience.

Space Command

Officially assigned and badged to the RAF, Space Command is a joint, tri-service organisation (currently an Army two-star major general is in command). Modern militaries rely on satellite and wireless communications like never before and for just about everything involved in command and control. Space Command is there to protect UK and NATO communications, while also developing means of counteracting, disrupting and destroying the enemy’s. As it says on the RAF website, ‘Space is a congested and competitive domain. Hazards in space range from space weather to space debris. The space domain also includes a growing range of threats, including nefarious activity from hostile and irresponsible actors seeking to maximise their advantage in the space domain’.

In a worrying development, Russia can target and destroy specific satellites and has done so on at least two occasions (not only destroying them but creating significant debris fields, dangerous to all other satellites including, presumably, its own).

As a prelude to an all-out attack, one would expect an enemy to launch a major cyber assault on all command and control systems, both military and civilian to render the defences blind and inoperable.

In 2021 as part of Boris Johnson’s Integrated Foreign and Defence Review, cyber was recognised as a sufficiently significant threat to warrant the creation of this joint command. £16bn was allocated to cyber defence. However, the only conclusion one could draw from the financing structure, much of which had to be self-funded from the existing defence budget (directly leading to another reduction in conventional forces: fewer ships, tanks and aircraft) was that the Treasury, if not the MoD, saw cyber as a replacement threat. To be completely clear, it is no such thing: however complex technically, it is simply an extension of the same threat but in a different dimension.

[As an aside, but entirely pertinent, when HMS Queen Elizabeth was undergoing sea trials and a fly-on-the-wall television crew was aboard, a group of fresh-minted young officers straight out of Dartmouth naval college was being trained in the use of the sextant, something they had not learned at the academy, it being deemed ancient, out-of-the ark redundant technology. They found it amusing, not least that their instructor was no less than the ship’s Captain, Jerry Kydd, a doughty old sea dog. No doubt for the benefit of the cameras, one asked why they were bothering, what the point was, raising an indulgent laugh from his companions. Kydd, in a friendly but firm tone replied: ‘down below we have an operations and warfare room crammed full of the latest technology and GPS navigation systems. It is immensely sophisticated and has fantastic capability. But when the Russians have jammed it all, or destroyed the command and control satellites, what you do not want to be doing is driving a 55,000 ton warship aimlessly around the ocean with no idea of where you are, where you have been or where you are going. With an Admiralty chart, a sextant, a ruler, a pencil, a pair of dividers, compass and a clock, you will always be able to work out your position and your bearing. So if you’ve had enough of the funny business, I suggest you get on with learning to use the sextant.’ Jerry Kydd is a Wise Man].

Missing in action: the UK’s Iron Dome

The Ukrainian and Israeli conflicts transmitted daily into our homes by real-time television highlight the vulnerability of civilian populations to air attack, whether by aircraft, ballistic or cruise missiles or drones. Many will have been appalled by the damage done in Ukraine and Gaza and been equally impressed by Israel’s ‘Iron Dome’ air defence system offering a high level of protection against incoming missiles from Iran and its proxies. They might be bemused to know that here in the UK we have no equivalent system and haven’t for more than 40 years.

If a direct invasion of the UK is improbable, aerial attack to remove us as a player is highly likely. The received wisdom has been 1) the assessment that the risk of air attack against the UK is limited; 2) the cost of installing a system is prohibitive; and 3) if missiles are directed our way, it is presumed that the Poles, Germans, Danes, Dutch, Belgians or French will have dealt with them by the time they arrive.

There are two fundamental flaws in this argument. First, that if missiles are sent from the east they are within range of the UK because the Russians have already advanced so far into Europe that either the countries above have already fallen or they are so pre-occupied with their own self-defence that ours is of zero importance to them. Second, that in rugby parlance, an initial attack is more likely to be launched from the open side than the blind side, i.e. a ballistic or cruise missile attack from the Atlantic, by submarine or ship.

Apart from centres of government and densely populated civilian areas (London, Birmingham, Manchester, Liverpool, Bristol, Glasgow etc), key infrastructure targets would be major ports (Immingham, Felixstowe, Tilbury, Dover/Folkestone including the Tunnel, Southampton/Portsmouth, Plymouth, Bristol and Liverpool), power stations (Drax, Hinckley Point, Sizewell, Dungeness, Torness etc) and military manufacturing sites (Barrow, Rosyth, Govan, Birkenhead, Belfast for ships; Derby, Filton, Samlesbury and Wharton for aircraft assembly and engines; Telford for tanks; Scotswood and Stevenage for missiles to name but a few), as well as military targets including airfields as described earlier, and naval dockyards in particular focusing on the Clyde UK nuclear deterrent facilities at Faslane and Loch Long in Scotland.

Defence experts remain deeply divided on the issue of national protection against aerial attack, balancing probability against cost. So far the conclusion is that relying on the army’s Sky Sabre (the replacement for the obsolete Rapier system, it is designed to move tactically with troops to provide anti-air cover  more than it is a strategic national air defence system), Sea Viper as mounted in the current Type 45 Daring Class destroyers and awaiting the new Type 86 ships with their anti-hypersonic missile technology, in more than a decade, will suffice. Also being trialled is the truck-mounted HEWLS laser system developed by Raytheon for the destruction of drones, reportedly at 10 pence a shot (which by defence standards, if consistently successful, makes it a veritable bargain).

While policymakers are so far taking a calculated risk that a direct air attack will not happen against the UK sufficient not to develop the equivalent of a layered Iron Dome (which would almost certainly cost billions of pounds), it is notable that in the US, Donald Trump is planning to throw a defensive ‘ring of steel’ around his entire country.

The quid pro quo of not developing an integrated, layered home air defence shield is the need for comprehensive civil contingency disaster planning in the event the gamble backfires.   

Environment, Social & Governance: “Your Country Needs You!” (and to eat more chips)

Green smokescreen: The government is committed to net-zero emissions. From 2030 it will be illegal in the UK for new combustion engine vehicles to be sold by an original manufacturer. Like any other government department the MoD is subject to net-zero policy too though it is not clear what leeway there is on vehicles, aircraft and ship propulsion systems for the military. The Army is trialling hybrid vehicles, the RAF knows it will have to adapt to Sustainable Aviation Fuel (a mix of hydrocarbon and other organic matter including recycled chip fat to make jet fuel), and the Navy is considering hydrogen and other fuels as sources of motive power to go alongside the nuclear technology with which it powers its SSBN and SSN submarine flotillas (and has done very successfully since the 1950s).

Back in 2021 the then CDS made it a strategic objective for our forces to be the ‘most green’, to lead the world in the use of environmentally friendly fuels and changing other modi operandi to reduce greenhouse gas emissions. It is an ideological point of view with substantial civil service traction in the MoD.

Leaving aside the curious juxtaposition and contradiction of a green environmental ambition against the ability to lay waste a continent and to leave what remains toxic for a generation, such a worthy ambition only makes military sense if there is zero competitive concession against what an enemy is capable of fielding. It is an exaggeration but it makes the point: it is no consolation to have retained the moral high ground but lost militarily on the battle ground because a diesel-powered enemy ran rings around you and destroyed you while your own EVs were plugged into the Economy 7 and were incapable of moving. Electric vehicles for the sake of it are a non-starter: they are inflexible, limited and are likely to be prohibitively heavy compromising firepower and range with propulsion; the only positives are relative silence and a lower heat profile possibly giving better protection from heat-seeking missiles. Hybrids on the other hand have potential: they have the flexibility of both diesel and electricity and the capacity to move relatively silently, albeit for short distances. But be in zero doubt: whatever the propulsion solutions for vehicles, aircraft and ships the cost of replacing or adapting all the armed forces’ mechanised kit to conform to net-zero conditions will be a defence-crippling commitment financially. To HMG and the defence Reviewers, in the context of defence the only enemy is the one in front of you pointing a gun and wanting to kill you; it is not the climate.

People problems: All three Services have a chronic manning and fitness problem (headline in The Times, December 24^th 2024: “Fifth of the forces can’t be relied on to fight” as a report says 10,000 regular personnel are medically unfit while another 15,000 have medical conditions applied to where they can be deployed and under what restrictions).

The causes are varied and complex, certainly when it comes to retention: they include pay and conditions (particularly housing); operational fatigue, stress and separation; career satisfaction and progression; the extent to which personnel and their families are mucked about by the ‘brass’ (everyone knows it is part of forces life: it is the extent to which some of it is unnecessary to the point of uncaring or worse, casual negligence). Recruitment, on the other hand, is a different issue. All three services are experiencing more people leaving than are being admitted. However, there is no shortage of applicants: in the 12 months to April 2024, for example, 26,650 people applied to join the regular Royal Navy/Royal Marines; 96,050 applied to be an Army Regular; 34,870 tried for the RAF. But across the board, only 10% of applicants were successfully admitted. Ten percent! Over half dropped out because the process was too long (57% gave up after 6 months of still not starting to be processed; to gain entry to the potential officers’ Royal Military Academy at Sandhurst for example, with three intakes a year and a protracted admissions process, anecdotally it is unusual for the time between pressing “submit” on the application to a cadet’s first day at the Academy to be less than 12 months, 18 months is a rough average and two years is regularly heard of). There is a natural rejection for people who fail the nationality or residency tests, or do not have the qualifications, or fail security vetting; but a significant percentage are rejected on medical grounds where the default setting is “no, not unless you’re perfect” rather than “yes, but it’s possible we might have to fail you later, let’s see how you shape up”. Healthy, perfectly capable specimens are rejected for old sports or childhood injuries, or junior eczema etc, even if they might have fully recovered and are demonstrably fit; the default setting should be reversed immediately.

The filters (e.g. health, security, qualifications, residency etc) are set by the MoD; the recruitment process itself is largely subcontracted and undertaken by Capita PLC; it is widely regarded as having been both a failure and an own goal to have separated the armed forces and their ability directly to recruit.

A further own goal has been the significant reduction in the number of local drill halls and training establishments for reservists. While actively wanting to recruit more part-timers, the MoD has almost gone out of its way to make it more difficult (of the three Services, only the RAF meets its target reservist establishment). It is now not uncommon for reservists to have to travel 100 miles each way at the weekend to train for the job for which they are volunteering in their spare time. It is counterproductive and off-putting (leaving aside that the acceptance hurdles are just as demanding and long as for the regulars). There is an easy win here, albeit at a price. 

The cadet forces and university OTCs are a useful source of keen, informed and militarily aware potential recruits. There are pressures on the MoD cadet and OTC budgets in all three services. However, it is unfortunate that through the Department for Education, the new government has already announced the cessation of the DfE funded Combined Cadet Forces in state schools; it is true that most CCF units are found in private schools and whether the government’s anti-private education agenda piling on the costs causes individual schools to cut their funding for CCF activities remains to be seen. That notwithstanding, the general sentiment towards disintermediating education and the military is unhelpful.

The MoD is a firm believer that when it comes to ethnicity, race and gender the composition of the UK’s armed services should reflect broad society. It is an admirable sentiment but in practice none of the services has managed its DEI programmes well which on this score reflects poor leadership. It becomes a minefield when targets and quotas are set. The RAF embarrassingly and very publicly found itself in hot water when it was found actively to be discriminating against white men in its pilot/aircrew recruitment programme, for example.

The Armed Services should ideally reflect the population from which they are drawn (it means every sector of society has a self-interested stake in defence). However, the harsh reality is that the only thing that matters is scaring the living daylights out of any potential foe. Whoever they are or whatever their background, the prerequisite is to have sufficient people of the right calibre for the job, who are war-minded, who are naturally aggressive and not only buzzing for a fight but are capable of at least matching the warfighting ability and violence of our enemies. The military only has two objectives: the first is to deter and if that fails, it is to win unconditionally by whatever means. If DEI and social engineering deliver that capability, wonderful; if not, then pursuing such a political and social goal for its own sake increases the likelihood of military failure and literally defeats the object of the exercise.

Finally, even though the business of the armed forces is death and destruction, progressive sensibilities on health and safety, and exercising duties of care, and today’s litigious ‘no-win-no-fee’ society all combine to dictate that the peacetime three services are almost chronically risk-averse over every aspect of military life. In 2022/3, the MoD paid out £160m in compensation and injury claims, up from £124m in 2021/2; those figures are the sums paid to claimants and do not include legal fees and associated staff costs to process each claim. Servicemen and women have rights and entitlements just like anyone else, though wartime conditions would require a significant change in mentality and approach. In context, however, £160m would pay the fully-loaded employment costs (ex-accommodation) of over 4,000 new first-rung privates, airmen or sailors, or it would buy more than 20 Challenger 3 tanks. Per year.

Listen to Part 5

Part 5: UK Policy-Taking Back Control

Bringing this all together, let us now turn to UK government policy both in terms of defence and broader national security.

Identifying The Need

“War is nothing but the continuation of policy with other means” (Carl von Clausewitz, 1780-1831)

Clausewitz’s dictum is simple, highly perceptive and astute. It has a double meaning. He was of his time: a Prussian general and theorist at the peak of his influence when Prussia was a militaristic society, a regional power with its own continental ambitions. Nevertheless most of his adult life was spent trying to prevent Napoleon conquering all of Europe. For him, war was a natural and logical means of extending policy and achieving goals in his government’s national interests. The reverse side of his thesis is the implication that if someone else attacks you, it is because you are weak, you have allowed yourself to have advantage taken against you, your diplomacy has nothing to back it up, policy in your own national interest has failed. In either state, offensively or defensively and as a deterrent, military strength is a pre-requisite. His theories might have been expounded two centuries ago, but this one is as pertinent and valid today as it was then.

Since the Second World War, depending on one’s point of view, UK defence policy has either laboured under the burden of the nation’s past, or been flattered by it: the lingering effect of the United Kingdom’s history as a global superpower (and for a period of around 150 years until the First World War when it was arguably the only superpower having colonised a third of the globe; it had regional rivals, certainly, but none that could match its global reach). That power was projected and protected globally largely by the dominance of the Royal Navy. The Imperial era of dominance and patronage (so generously reciprocated by the Dominions, notably Canada, Australia, New Zealand and India in WW2) receded in the post-War years to be replaced by US-led NATO and the looser associations among the newly independent members of the Commonwealth, a process largely completed through Labour’s foreign policy of withdrawal from “East of Aden” in the 1960s. However, those global associations, relationships and experiences allied to the UK’s historical military power and its acknowledged expertise and professionalism have kept the country as a significant influence at the forefront of western military philosophy and strategy.

But as Clausewitz implies, the military is not a separate arm of the State, it is simply an extension of governmental politics. Ultimately, the military is deployed where and when the government decrees in the national interest; the armed forces are not at liberty cherry-pick their contests. Politicians determine the goal and the end, by which the military may be the means to achieve it. Living off its history and reputation, the trap into which the UK has fallen over the decades is a failure of maintaining the military means in the national interest. We have allowed the accrual of a yawning deficit between what politicians have in mind the military might be called upon to do and what it is capable of achieving. The most obvious and embarrassing example was David Cameron’s ill-considered and spontaneous vanity project (in conjunction with Nicolas Sarkozy of France and Barak Obama and his Secretary of State Hilary Clinton) to take advantage of the Arab Spring in 2011. With no idea of what they were doing or whom they were supporting, and in the aftermath of the 2010 SDSR in which Cameron had scrapped all our aircraft carriers and sold their Harriers to America, the RAF was left to bomb Libya with single aircraft flying from RAF Marham in Norfolk until it could negotiate the use of a base closer by; the Royal Navy’s only destroyer in the entire region, HMS Liverpool, diverted to the Gulf of Sirte to help evacuate British nationals, was joylessly reported in the press as being on its way home to the knacker’s yard having been axed in Cameron’s defence cuts. It was a very obvious signal to friend and foe alike that in this context in military matters we were no longer a serious player.

We punch above our weight but the hand in the glove is increasingly feeble, even more so than in 2012. Put simply, if governments want to rely on the armed forces either to project foreign policy or more importantly to meet their duty to keep us safe, they have to pay for the capability and the capacity that meets the need and, critically, the electorate (i.e. the taxpayer) has to be educated as to the necessity.

Unconditional duty    

The government has that one overarching duty: to keep us safe. Everything else it does is subsidiary to that. How it discharges its responsibility breaks down into four headline commitments:

Defence of the United Kingdom and its people: the defence of these islands and its people is the most basic, unconditional duty of any British government. It is multi-faceted and complex. It is not just the purely military angle of providing air defence or the military capability to withstand invasion, or the naval capacity to prevent a blockade. Today it also encompasses the irregular, asymmetric, hybrid and cyber threats posed by state and non-state players, or other threat actors, interfering with our government structures and governance protocols. The means by which they do this ranges from terrorism to infiltration, insinuation and technologically driven subversion. Government must also protect individuals’ and companies’ as well as its own critical infrastructure from disruption or destruction. Today, data is power; through the rapid development of technology as we embark on the latest phase in the technology revolution (5G, quantum computing, generative AI etc), the exponential proliferation of data matched by the almost equal difficulty in keeping it safe presents a significant security challenge. Stolen data is an essential source of intelligence. It is also an extortionist’s leverage: a currency in the crypto world of the dark web and malign players, whether criminal, state-sponsored or even at the state level through which innocent victims are made to pay or endure significant forfeits.

Homeland Security in its broadest and most literal applicable senses is not just the preserve of the MoD as a siloed government department: it links directly with others including the Home Office, the Foreign Office, the Cabinet Office, DEFRA, the Department for Business and Trade, the Department for Energy, the Transport Department, and the Department for Education.

Meeting the UK’s NATO and other treaty obligations: under the NATO treaty, the UK alongside every other member is required to spend a minimum of 2% of GDP on defence, within which 20% of the national defence budget must be on equipment. According to NATO’s own data, currently the UK spends 2.3% of GDP on defence and 31.6% of the budget on equipment. As at the end of 2024, NATO estimates that only 8 members will fail the 2% test (Croatia, Portugal, Italy, Canada, Belgium, Luxembourg, Slovenia and Spain; Canada and Belgium fail to meet both the 2% of GDP and the 20% on equipment minima).

Mark Rutte, the new NATO Secretary General has already intimated that the 2% bar should be raised uniformly to 3%. President Trump has talked of 5% as a minimum.

The UK is also committed to other defence treaties, notably the Five Eyes intelligence sharing agreement with the US, Canada, Australia and New Zealand and, as of 2021, the AUKUS treaty with the US and Australia as all three countries recognise both the threats and the opportunities in the Indo Pacific region. It also has bilateral pooling agreements with France and Germany (the latest of which was signed at the end of 2024 allowing Germany to base P8 Poseidon maritime reconnaissance/submarine hunting aircraft alongside the RAF’s own P8s at Lossiemouth in Scotland covering the Atlantic and the North Sea, and in return German defence contractor Rheinmetall will build a new gun-barrel factory in the UK).

Projecting UK foreign policy: the combination of our historic global reach and its modern evolution with the strong ties with the Commonwealth, plus having been one of the winning Allied Powers in WW2 and the possession of our nuclear arsenal secures our permanent seat at the UN Security Council. It confers soft power. And of course it brings us significant influence in NATO albeit the US is undoubtedly the dominant partner in the 32-country alliance. 

Protecting the UK’s overseas territorial and maritime interests: Britain still has 14 Overseas Territories (e.g. the Falklands and South Georgia; Cayman Islands; the British Indian Ocean Territory which includes the Chagos Islands and Diego Garcia; Ascension Island in the Atlantic; Gibraltar etc) and Crown Dependencies (Isle of Man, Jersey and Guernsey) for which it is directly responsible. Some, notably Diego Garcia, Ascension, Akrotiri in Cyprus, the British Antarctic Territories, Gibraltar and the Falklands, are of great global strategic importance either because of their location for military staging and surveillance, or their proximity to strategic reserves of natural resources of direct national interest to the UK.

The Political Case for defence and national security

The winning formula: hope for the best, prepare for the worst.

Overarching national defence and security policy should be founded upon an optimism that all will be well but only because you are sufficiently constructively paranoid that a failure to prepare for the worst would lead to a demonstrably bad outcome. Defence can be seen on a spectrum: at one end, total self-reliance and complete control but at significant cost; at the other, total reliance on third parties to provide all your defence needs. As you travel along the spectrum away from total control and self-reliance, it is a calculated decision increasingly to sub-contract responsibility to others. Where is the tipping point between defence pragmatism and abrogation of responsibility? The answer is that nobody knows until the threat crystallises by which time it is too late to take whatever remedial action is required.

The parallels with the mid-1930s are stark. The threats are complex but visible. A new, widespread Cold War is already simmering with the increasing probability of boiling over into a full-scale Hot War for which we in the United Kingdom are woefully under-resourced and ill-prepared.

It is an old political trope that there are “no votes in defence”. The risk is that by the time the electorate is sufficiently alarmed to take note and to engage it is too late. We do not get the luxury of choosing when our enemies decide to attack us or our neighbours; the most logical time is when he/they perceive we are at our weakest and why wait? The government’s job is to make every effort to ensure they do not do so in the first place.

Defence is unique among government spending departments. The aim of health policy is to demonstrate greater effectiveness of treatments for more people and to produce better ‘wellness’; education should lead to better life chances for the young; law and order reduces crime; transport aims to improve our connectivity; housing policy should provide affordable accommodation; industrial policy should create growth and opportunity etc. All demonstrate positive outcomes (that’s the theory, anyway). What differentiates defence policy and represents a great political challenge is the need to prove a negative: it succeeded because we were not attacked and we did not have a war; it is a very different mindset. From a budgeting point of view, with other more appealing priorities it therefore runs the risk of what is the minimum you can get away with spending on what can become perceived as ‘idle’ armed forces without reaching the tipping point where someone wanting to attack reckons the odds are now in their favour. It is similar to your house insurance: you can choose what level of cover to take out in return for a given premium; you hope never to have to make a claim but it’s only when the house has burned down that you know for sure if the cover was adequate. The difference between defence policy and home insurance is that defence is prophylactic: it is designed to prevent the house catching fire (‘ex-ante’) rather than giving compensation for rebuilding the ruins (‘post hoc’).

For all that it is a difficult argument, it is no less necessary. Making that case is about moral and political leadership. It is about educating the public and taking a principled stand. When the risks are so great, as they are today, failure to make the case is a wanton dereliction of duty. For the avoidance of doubt, there are no silver medals and a place on the podium with a bunch of flowers for coming second in a war. There are only winners and losers: coming second in a military punch-up means you’ve lost, possibly with catastrophic and potentially existential consequences.

It is on this point that the political case must be made that defence and national security are not simply about the military and relying on 135,000 regular service personnel and the 29,500 reservists who are prepared to put their lives on the line to protect the rest of us. The entire population has a responsibility. CGS Sir Roly Walker and Sir Richard Dearlove, former head of MI6, frame it respectively as becoming ‘nationally war-minded’ and in terms of our ‘warrior mentality’. In the mid-1930s faced with similar threats, before full-scale conscription, men and women were flocking to their local recruiting centres to sign up for the volunteer reserves. There is no sign of that today. They either do not see the threat as real or if it is, take the attitude that it is not their problem. Has that time not come, however? It is up to political leaders, starting at the very top, to make the case why it is not only a need but a duty in the national interest. We are all in this together.

It is curious that our Prime Minister is vocal on the international stage and with our allies about the need to be supportive of Ukraine and the need to prioritise defence. The same urgency for a new or significantly different attitude, specifically to defence and an over-arching national security policy for the UK, is not a message made or received at home. The 2025 Strategic Defence Review’s terms of reference explicitly prescribe the budgetary constraint, defining it as a trajectory towards a maximum limit of 2.5% of GDP, which is already likely to be superseded by a NATO mandated new minimum of at least 3% and empirical proof of outputs; Rachel Reeves says there is no ‘magic money tree for defence’, the Armed Forces minister Luke Pollard says the ‘economy must grow before defence spending can rise’. Before Christmas, Keir Starmer was forced to press the re-set button on his faltering administration. He announced six new priorities. They are, in order: 1) higher living standards; 2) making children ‘school ready’; 3) recruiting more police; 4) building 1.5 million new houses; 5) developing home-grown clean energy; 6) getting rid of the hospital backlogs. Defence does not feature. Foreign Secretary David Lammy sees the greatest challenge facing his department to be climate change, rather than the direct threats posed by Russia, China, Iran and North Korea identified by the government’s own intelligence agencies. Taking all this together, the inescapable conclusion is that ostensibly even if of some importance, defence is not a significant priority.

In the dying days of his premiership, Rishi Sunak did begin to make the political case. He wrested the defence budget from the Treasury and restored Boris Johnson’s explicit target of pushing defence spending to 2.5% of GDP with a date-stamp of 2030; he explicitly wanted to ‘put the country on a war footing’. But it was too late to come to anything and his half-formed and badly articulated plan in the manifesto for school leavers either to do a period of community service or military training was derided. But at least it was on the right track. The cudgel has not so far been picked up by Starmer.

The Fiscal case: creating the financial room to breathe

From Nos 10 and 11 Downing Street, whether in this administration or its predecessor, Starmer and Reeves, Sunak and Hunt respectively talk and talked of hard/difficult/eye-watering choices to be made about public spending. In the event each in his/her own way ducked the issue. Former Chancellor Jeremy Hunt explicitly deferred any decisions a Tory government might make until after the election. Rachel Reeves, his successor, opted to make generous public sector pay awards totalling £9bn and doled out an extra £22bn to the NHS but without any pre-requisite conditions which might lead to public sector reform.

Today, the tax burden is the highest outside wartime and the outstanding public sector debt is almost 100% of GDP and likely to climb further. Between 2019 and 2024, thanks to a significant pandemic-related jump in borrowings and higher funding costs due to that and sharply higher interest rates need to control the big spike in inflation, the annual cost of servicing the UK government debt has more than doubled from around £45bn a year to an estimated £100bn in the current fiscal year (and despite the interest rate cycle turning since the summer of 2023, UK government funding costs as measured by bond yields have continued to rise, at the time of writing to the highest levels seen since 2007). That difference in the annual interest bill of £55bn is greater than the 2023/4 defence budget (another way of looking at it is that as a nation we spend double the amount servicing government debt as we do to defend ourselves). Governments control their expenditure; they exercise a strong degree but not total control of their taxation income; they do not control growth. Growth is essential for future economic prospects but the surest way to reduce debt without killing the economy is to curb expenditure. Reducing expenditure need not mean a depletion of public services if it comes about through a process of fundamental reform: i.e. doing things differently for a better outcome and reducing the size of the State. Repeating the same again only less of it and expecting a better result simply proves Einstein’s Theorem of Quantum Insanity; crude cuts are debilitating and reductive and meet strong resistance. As explained elsewhere in the context of defence spending but applicable to all government departments it is not merely a case of how much money is spent but how efficiently it is deployed. Public sector reform underpinned by a very different approach takes time, it requires deep intellectual rigour, careful planning, clear explanation and communication, effective implementation and execution. It is undeniably difficult but it is the only way out of the never-ending fiscal vortex. Reducing the debt and with it the debt interest gives a government options and head-room about future spending priorities, including defence of the Realm.

It is fiscally unintelligent and morally bankrupt to claim there is nothing but the chosen path. With the exception of defence, the police, the judicial system and the provision of a minimum safety net for the truly needy, every other facet of government spending has alternatives. There are many funding and operating models available for the provision of every other service including health, education, elderly care, transport, utilities etc. It is reductive and childish politics for government and the opposition constantly to sling mud about who ‘trashed the economy’, or whose legacy forced whom to raise taxes or to cut spending. The truth is that in this millennium both Labour and the Tories are equally to blame. In 1997 New Labour was bequeathed a budget surplus and net debt/GDP of 37% which by the time it left office in 2010, in the aftermath of the Global Financial Crisis, had become a deficit of 8.7% and debt/GDP of 67%. Tory austerity failed to solve persistent deficits or to reduce borrowings, a position exacerbated by the explosion in debt with the pandemic mitigation costs (which Labour not only endorsed but advocated even greater support). In every year since 2000, every government of whatever colour has delivered a budget deficit; central bank quantitative easing and ‘free’ money, supported by the markets’ complicity to fund enduring deficits willingly, offered an irresistible temptation to increase borrowing and to keep spending on the never-never. Despite both Conservative and Labour governments pledging to be fiscally prudent and responsible, the government’s own official arbiter of fiscal probity, the Office for Budget Responsibility, making assumptions about current spending, changing demographics and future plans for meeting carbon net-zero, foretells of the likely outcome of the current strategy: the OBR estimates that by 2074, UK government debt as a percentage of GDP will be around 275% and the annual interest cost will amount to 12.5% of GDP against 4.5% today (the tipping point in the OBR’s view is 2050 beyond which, left unchecked, the fiscal momentum is that of a runaway train). For a government knowingly to allow the fiscal and financial situation to deteriorate that far is as irresponsible as it is unsustainable.   

Go back to the mid-1930s. Data from the Office for National Statistics shows that between 1933 and 1938 UK defence spending increased from 2.2% of GDP to 6.9% as German rearmament became a reality and the imperial ambitions of Japan and Italy were increasingly apparent. In 1933, total UK government spending was only 26% of GDP compared with 45% in 2024. By 1944 at the peak of the war, defence spending was over 50% of all government outgoings. While today’s threats are different and the nuclear deterrent did not exist 90 years ago, nevertheless at least the government had fiscal options to be able to react appropriately. Today it has few that do not include painful but necessary choices. Fifty years hence, if the OBR is correct, the UK will be so financially distressed it will have no choices at all. In the context of defence, consider the following: in 2025, Russia will allocate over 40% of all government spending to its military; the UK will spend over 40% on an unreformed, dysfunctional health sector. It’s all about priorities and choices, but others are making their own which might be very different from ours.

Keir Starmer has strong socialist principles. He has his own political priorities, particularly in favour of the public sector. That he has the freedom to exercise both has been won through a democratic process. But he still has a duty of care to the public as a whole. He has the opportunity to become a great leader and statesman but it requires him to make significant compromises with his core constituency in the public sector to get a firm grip on fiscal reality. Does Starmer have the bravery not only to recognise the need but also to rise to the challenge of addressing the country’s finances in the national interest and security? The evidence to date says ‘no’ to both; time is rapidly running out but it is not too late to change course.

The investment community should take a lead: offer a hypothecated, fixed duration National Defence Loan (last raised in 1936) but only on condition that a blueprint for procurement reform is produced first, with very clear, measurable key performance indicators and explicit milestone deliveries. Failure to deliver on KPIs would equate to default and the loan would be called, those responsible would be held to account. The lure of a large carrot backed up with a big stick could be just what is needed. If the Prime Minister does his bit, we will do ours.  

Making the Review genuinely strategic

But let us take the process one logical step further and make the Review genuinely strategic. Let us make it about national security and resilience rather than merely focusing on the military aspect of defence. The whole point should be as far as possible to be in control of events rather than events constantly controlling us. In two very different contexts, ‘Taking back control’ was a phrase deployed by Boris Johnson in 2019 (Brexit) and by Keir Starmer in 2024 (government intervention); why not frame it as ‘being master of one’s own destiny’. In this sense of national security and resilience it is explicitly not about isolationism; it is about self-reliance and taking the responsibility to ensure the essentials to preserve our society and the economy.  On that basis the following are integral to the SDR:

Foreign policy: David Lammy is ‘looking forward to being involved’ with the 2025 SDR process. His department’s participation should be essential. The new Labour government’s foreign policy programme is off to a shaky start.

A naturally Europhile British socialist prime minister is finding out quickly that the EU is not the bollard of stability to which he hoped to moor Britain’s fortunes. European politics are heading increasingly rapidly rightwards and becoming more nationalistic, away from his political comfort zone. With several members of his cabinet having been publicly rude about Donald Trump, including prominently his Foreign Secretary, Starmer begins his relationship with the new US President on the back foot.

The UK maintains a robust position on Russia and remains a cornerstone ally of Ukraine (though the vigour has audibly diluted since Boris Johnson was in office). China is a different problem. China’s strategic ambition to be the dominant global superpower by 2049 (the centenary of the founding of the Chinese Communist Party) is explicit. For the UK, evidence abounds from the intelligence services about the extent to which by various means of espionage and subterfuge China has infiltrated every aspect of our economy, our education system (especially universities), the establishment and government, even the Royal Family. It is unfortunate that the intelligence services and the government are at public odds over Keir Starmer’s reluctance formally to define China as a threat to national security. Were the threat formally acknowledged, the UK would be contemplating sanctions, not only because of the risk to the UK but relating to China’s record of human rights abuses in Tibet, Hong Kong and to the Uyghur Muslim community. Starmer rejects that in favour of dialogue as the more constructive approach; that is a political choice and within the government’s rights. Starmer is General Secretary Xi Jinping’s sixth British Prime Minister, though the first Labour one. There is not much from Britain Xi has not seen already in terms of Anglo-Sino relations. Harking back to the future, Starmer’s policy of engagement (the ‘Three Cs’: challenge, compete, cooperate) most closely mirrors that of David Cameron and George Osborne. Challenging engagement, constructive dialogue, appeasement, kow-tow, call it what you will but do not think for one moment that dialogue and cooperation will cause China’s strategy to soften or deviate, or the strategic threat to diminish: it will not (Angela Merkel made that same mistake with Putin, thinking that cooperation would make him more amenable, a catastrophic policy).

China can only be pleased by the decision of the new government to act upon the non-binding conclusion of the International Court for the UK to donate the Chagos Islands in the Indian Ocean to Mauritius, a country evidentially in China’s sphere of influence. The decision was against the wishes of the Chagossians. It is bizarre to pay a significant phased premium, estimated at £9bn, to give away a sovereign asset. Even though the British strategic base on Diego Garcia sublet to the US will be covered by a gift-and-lease-back arrangement for 100 years with Mauritius, China’s unfettered access to the adjacent islands in the rest of the highly sensitive archipelago is now virtually assured, potentially compromising sensitive NATO activities. Trump sees it as a bad deal. If the arrangement is shelved it will be because the new US administration has vetoed it, not a change of principle on the part of the Labour government in the UK. However much Starmer protests otherwise, it sends off clear implications that without too much pushing the other British Overseas Territories (including the Falklands and Gibraltar) are either negotiable or His Majesty’s Government is little concerned with their security.

The new government’s position on Israel is incoherent and inconsistent. Israel is faced with literally an existential threat, the extirpation of its people and the obliteration of its sovereign state from the map. The UK cannot simultaneously with any credibility declare that its support for Israeli self-defence is ‘cast iron’ while fully endorsing the International Criminal Court indictment of Israel’s prime minister and defence minister on charges of war crimes and genocide. It is one or the other but not both. 

The UK is a sovereign nation: it must determine its own foreign policies in its own interests. At present, pointedly demurring from Trump’s couched threat that the UK needs to figure out which of its allies really butters its bread, it is far from clear what the strategic direction is. As one intelligent intelligence member observed, ‘this government seems intent on having its cake and eating it with China while annoying the Americans’; it is not as though Starmer has many bosom-buddies in Europe either, not that he can count on for very long. To be isolationist by design is a perfectly rational course of action; to be isolated through being obtuse or careless is irrational.       

Industrial security: the UK has a big trade deficit in both goods and services. The structural economic imbalance in favour of services is pronounced. In terms of manufactured goods since 2000 the ONS estimates that UK exports have risen 34% in real terms to around £390bn a year; meanwhile our imports have nearly doubled to £590bn a year in the same period. For defence, of particular concern is steel which, with the long-term decline in domestic manufacture, now accelerated by environmental emissions policies closing the last remaining blast furnace production, means we are now heavily reliant on imports for high quality, virgin product. An increasingly important source is China. Seen in the context of Chinese global ambitions (the New World Order) one must question the wisdom of allowing this. In a pertinent juxtaposition, President Biden recently refused the acquisition of US Steel by Nippon Steel of Japan (and Japan is a formal ally) because it is contrary to America’s national interest.

‘America innovates, Europe regulates and China imitates’, as the saying goes. It is no coincidence that the US has vibrant manufacturing and technology sectors. In Europe, as Italy’s premier Georgia Meloni said in 2024, the EU is ‘regulating itself into oblivion’; the EU has no tech industry to speak of and its manufacturing industry is in relative if not actual decline. Through a burgeoning number of new quangos, the UK is showing an accelerating tendency to regulate rather than to innovate. China is rapidly shifting from reproduction and mimicry to technological leadership, particularly in defence, aerospace, automotive, technology and the pharma sectors. Strategically, the UK should be rebalancing its economy through vigorous product innovation and removing as many barriers and frictional impediments as possible. 

If Starmer is serious about defence being an important part of future growth, then a significant scaling up is required in naval, military and aerospace manufacturing capacity. But it must also allow attractive returns (the government is competing for capital among many other attractive opportunities available to investors) and also provide commercial export opportunities for contractors and their investors not only to invest upfront but to keep reinvesting.

Technological security: Keir Starmer clearly wants the UK to be at the forefront of the AI revolution. However, for hardware, the UK relies heavily, if not almost entirely on outside sources of semi-conductors (used in every single machine, appliance or electronic gadget from space satellites to aeroplanes, cars, mobile phones, laptops, electric hobs and hair dryers). Notwithstanding the difficulties of intellectual property and the cost of development, surely it must be in the national interest to have our own semi-conductor foundries rather than being beholden to foreign suppliers, particularly Taiwan which is explicitly on the target list for China to restore to the Motherland. Much the same applies to data centres: we need them here, not abroad.

Energy security: one of the most effective ways of causing a 21st century ‘developed’ economy and society to collapse is to disrupt the supply of electricity. Lights, heating, fridges, freezers, mobile phones, laptops, air conditioners, payment systems, trains and soon most people’s cars, all off. Imagine the pandemonium and the ability not to function, not to be able to travel, interact or transact. The political consequences would be immediate and severe.

Some including nuclear installations or a big conventional plant such as Drax power station in S. Yorks are more so than others but all power generating assets are vulnerable to attack. We are also increasingly at risk when relying on a higher percentage of imports whether it be shipped or piped gas and oil, or sub-sea cables transmitting electricity.

There is political risk to the energy supply as well as the physical risk of destruction or disruption: most of our nuclear generating assets belong to French group EDF, 100% owned by the French government; with the UK government openly hostile to fracking and any further exploitation of North Sea oil and gas, we are increasingly reliant on the US, Qatar and Libya for shipments of Liquid National Gas. We are importing electricity direct from Denmark, Holland and France, and soon from Morocco. In the event they choose to exercise it, the reliance confers political leverage and patronage on those countries.

I have discussed on many other occasions the intellectual void that is a policy which places an almost total reliance on intermittent energy sources as the focus for a national energy strategy to power the world’s sixth biggest economy; in terms of defence, solar and offshore wind assets have their own share of vulnerability. An aerial dousing of Napalm or water gel explosives, or the use of daisy-cutter bombs, would quickly take care of acres of solar panels at a time. It is already proven that offshore wind-farm cables can easily be cut and, using shockwave-through-water principles developed by Barnes Wallis in 1943 to destroy the great German dams, it might not be efficient compared with cable-cutting but it will not be beyond the wit of man to produce kamikaze submersible drones which, using even a relatively small explosive charge, can destroy an array of concrete structures such as wind turbine pylons.   

Food security: The population of England has grown more than 15% since 2001 to 57m people today; the ONS estimates that it will increase by a further 9.9% by 2036 to nearly 63m. Since 2001, the number of English dwellings has increased by 18% to 25m and government targets remain to build 300,000 new homes annually. Land usage for industrial development and infrastructure projects has also increased substantially.

At the end of 2023, according to Gov.UK the Utilised Agricultural Area of England was 8.8m hectares (21.7m acres), 68% of the total English land area. In less than a quarter of a century, 400,000 hectares or 988,000 acres of productive English farmland have been lost to development. In terms of percentage of the total, the three percentage point loss might seem marginal but in aggregate it is an area roughly the size of Kent. Under the “Food to Fork” programme, the government has a target that a minimum of 60% of UK foodstuffs should be sourced domestically; currently that figure stands at 52%.

Perhaps an easier way of understanding it is to condense these numbers into a land sustainability rate: in 2001 there were 0.185 hectares of agricultural land to feed each person in England; by the end of 2023, that figure had declined 17% to 0.154 hectares per person. And critically, today it still only supplies half of each person’s annual consumption.

Land is a finite resource (particularly on an island). There is pressure to build new homes and infrastructure for growth and meeting the needs of a rising population. Also obvious is the land being assigned to renewable energy projects. But with a new agricultural policy which actively incentivises the removal of productive land from our food security system (note that in the case of National Strategic Infrastructure Projects, the loss of food production is explicitly not a reason to be considered for refusal of energy projects), is it possible to square the strategic security circle? An additional consideration is environmental lobby groups applying the strong political pressure not only to increase the use of renewables including wind and solar, but at the same time to reduce the intensity of farming practices and to resist new, potentially higher-yielding technologies such as genetically modified crops. It is currently difficult to see how the 52% domestic production figure is maintained, let alone 60% attained.

Translating food self-sufficiency to food security and currently half our foodstuffs being imported, if the UK were blockaded again (and it has been attempted twice since 1914) and the ability either to transport foodstuffs or to unload them were significantly disrupted, rationing would quickly become the order of the day. From the point of view of national security and the 2025 SDR, and with a near-term prospect of the Navy struggling to prevent a blockade, surely the Reviewers should be considering the role of DEFRA in keeping the population fed.

The Defence Budget: off-beam with NATO’s direction of travel

Moving from broad economic strategy to the nuts and bolts of the MoD.

According to Statista, in 2023, the last full year for which reported data is available, the UK had the sixth biggest defence budget globally behind the US ($960bn), China ($296bn), Russia ($109bn), India ($83.6bn), and just pipping us, Saudi Arabia at $75.8bn (Germany’s is likely to have caught up in 2024). We have to take care making crude nominal comparisons: for example thanks to significantly lower wages and other costs of developing and procuring kit, $296bn buys a great deal more in China than the equivalent sum in the US (one Swedish thinktank, SIPI, estimates that for the same nominal wage bill, China can pay four times the numbers of soldiers, sailors and airmen as the US). SIPI reckons that on the equivalent parity of purchasing power, the Chinese budget on a like-for-like basis is closer to $700bn a year, and growing by over 8.6% pa.

Never was so much paid by so many to be spent on so little: with apologies to Churchill. Continuing from its Tory predecessor, the new Government’s thinking is dominated by the NATO requirement to spend a minimum of 2% of GDP on defence, of which 20% in turn must be on equipment. The UK currently manages 2.3% and 31.3% respectively and is therefore technically compliant. However, we are deluding ourselves if we think we are therefore adequately resourced for war: it is not the case that the UK is prepared because it spends 2.3% of GDP on defence, but it is demonstrably the case that it is woefully under-prepared despite spending 2.3%.

When peeling away the skin of the onion, an essential part of the 2025 Reviewers’ task is to resolve why, even excluding the cost of Trident, such a large UK budget produces an army, navy and air force none of which according to the Global Firepower world rankings of military effectiveness is in the top 15 in the world and each of which is shrinking both in nominal and relative terms.

The UK reaches 2.3% through what is termed ‘fully loaded costs’: as well as kit and military personnel, among other allocated costs it includes the central MoD departmental overhead (as at 1 October 2024 the MoD employed 62,631 civil servants), all military and defence department pensions (regulars have a generous pension scheme thanks to the nature of the job and the enforced retirement age of 55), and the egregious intra-departmental transfer-pricing mechanism for the maintenance of service housing and military buildings and installations managed by the government’s own Defence Infrastructure Organisation; last, but certainly not least, is the nuclear deterrent (Trident and its predecessor, Polaris) decommissioning liability and the cost of decommissioning time-expired nuclear powered submarines, currently assessed at £7bn and rising. Common to all government spending departments, the MoD has an Alice-in-Wonderland accounting system so Byzantine in complexity that it is virtually impenetrable to the average financially literate outsider and probably most insiders too; it must be a factor that today’s mess is partly that nobody really understands the numbers.

A year ago, in December 2023, the National Audit Office identified what it calculated to be a £17 billion ‘black hole’ in the forces’ equipment budget over the forthcoming decade. As it reported, in the worst case scenario £17 billion might actually turn out to be as high as £29.8 billion. The principal causes were identified as those nuclear decommissioning costs and the ‘soaring cost of naval ship-building’ which over 10 years had increased by ‘£54.6 billion over the original projected budget’. In context, that is roughly a whole year’s worth of UK defence spending which has been absorbed on two naval programmes whose budget management is completely out of control, exacerbated by the spike in inflation in the post-Pandemic, post-Ukraine invasion period. The inflationary element will be stoked further as UK defence contractors pass on the extra direct costs of employers’ National Insurance introduced in Rachel Reeves’s budget and the indirect frictional costs of employment introduced by Angela Rayner. 

Trump and Rutte up the ante: In the fiscal year 2023/4 the UK defence budget was £53.9bn. In 2024/5 it is projected to rise to £56.9bn, a 2.3% real terms increase. If the economy remains flat in 2025 (a not unreasonable assumption based on 2024’s performance and the collapse in business confidence going into 2025), that projected rise in defence spending would take the percentage of GDP to 2.4%, very close to the government’s aim of achieving 2.5%. But given the noises from the government that there is ‘no magic money tree for defence’ (Rachel Reeves December 2024) and ‘defence spending can only rise when the economy grows’ (Armed Forces Minister Luke Pollard, July 2024), do we assume that a 2.3% real terms increase would be a chimera in a year of zero growth significantly higher government borrowing costs and other departmental spending cuts?

More positively, let’s be generous and say that the UK economy will grow by 1.5% every year between now and the end of the parliament by which time the government also intends to have achieved 2.5% of GDP; that would imply an annual defence budget of £63bn in 2028/9. As it is, if NATO’s leadership and Trump succeed in pushing the bar from 2% to 3%, mathematically that is a 50% uplift in minimum annual expenditure; based on the 2023/4 budget of £53.9bn, for the UK to go from the equivalent of 2.3% to 3% would mean expenditure of £70.3bn a year, an increase of 30% or £16.4bn. While this appears shocking, let us not forget that during the Cold War, UK defence spending was habitually over 4% and in 1984 was 5.5%.

Forecasting and making strategic plans against so many moving parts in the assumptions, terms and conditions (particularly growth and GDP which the government does demonstrably not control) is a nonsense. The emphasis must be on meeting the need to keep us safe given an objective analysis of the risks. But until government and the military and the defence industry really get a grip on decision-making, procurement and delivery, this defence review will be no better than any of its predecessors. It will fail.

The heart of the UK defence conundrum: For decades, even back to Mrs Thatcher’s era and beyond, the defence budget has obeyed the Law of Diminishing Returns; in fact it is worse: every marginal pound of expenditure has delivered a quantitatively negative yield as measured in the smaller numbers of personnel, ships, tanks, guns, aircraft and diminishing infrastructure. That is as unacceptable as it is a national scandal.  It is not just about the bean-counter’s desire to demonstrate ‘value for money’ as expressed in the Review’s Scope. It is about what is not mentioned: literally bang for buck for the armed forces as measured by capability (the best people with the very best kit), capacity (lots of both) and sustainability (the ability to keep going until you’ve defeated the enemy; if you run out of bullets before he does, you’ve lost). The focus of this review MUST be as much on HOW the money is spent as HOW MUCH. Failure to address that renders the exercise largely futile.

Self-preservation if the Americans opt out: What also must be planned for is greater self-reliance, or more popularly framed as ‘NATO without Trump’. NATO’s own estimates are that in 2024, members’ total defence expenditure was $1.185 trillion of which $755 billion (63.7%) was provided by the US and $430 billion (36.3%) contributed by the other 31 members (including new joiners Finland and Sweden). This is significantly less out of balance than immediately prior to Putin’s invasion when total spend was $1.018 trillion and the US contribution was 69.2% (and for the record, 72.5% a decade ago). The US defence budget at $754.7 billion (at constant 2015 prices and exchange rates, or $967.7 billion at today’s nominal prices) is 10 times both that of the UK and Germany, the next two largest contributors. Of the $430bn accounted for by the 31 non-US members, 7 countries will have spent more than $20bn in 2024 (Canada $24.5bn; France $55.2bn; Germany $76.9bn; Italy $29.8bn; Poland $26.8bn; Turkey $27.0bn; and the UK $75.3bn). Between them they represent 73.3% in aggregate. Most of the rest are doing their best relative to the size of their economy (for example Poland is spending over 4% and is doubling the size of its army) but the reality is it is a small contribution in terms of mutual protection.

The hard fact is that however much progress has been made in forcing reluctant or backsliding delinquent nations to meet their obligations, the US is still doing most of the financial heavy lifting and contributing even more in terms of effective firepower. Its military spend dwarfs every other member’s.  Take the US out of the equation (in the event a US president, and it need not be exclusively Trump, decides an attack on a NATO member is either not an Article 5 event or one that fails to qualify for US help because that member has not been paying its dues) and it is essentially six European countries plus Canada who are financially on the hook for the defence of the entire European NATO landmass.

But what this review must address is the woeful state of the British armed forces. The result must be that not only can we make our NATO contribution but that we can look after ourselves without permanent recourse to others. The threats are different in nature and more complex but the natural benchmark should still be to have a defensive and fighting capability, capacity and sustainability that was the norm pre-1990, the most recent time the threats and risks were comparable.

Procurement: NATO and the UK’s Achilles Heel

Admiral Jackie Fisher, First Sea Lord in World War One when Churchill was First Lord of the Admiralty, was famous for his military axioms: one particularly punchy one was “Hit First! Hit hard! Keep hitting!”. Obviously, explicitly as a defensive alliance NATO will not “hit first”. It will have to “hit hard” in response to an attack, not least because its ability to “keep hitting” is very limited.

Defence procurement is NATO’s significant Achilles Heel. It is not just about military spending and budgets. It is also about the infrastructure that provides the capacity to wage a sustained war. And here NATO is demonstrably in big trouble. Its defence contracting industry is simply not geared up for wartime conditions, even in America. It is configured for peace. As former Defence Secretary Ben Wallace once said, ‘even if I was given an extra £10bn to spend on kit, I’d be unable to spend it immediately’. The principal fault is not that of the defence industry. National governments are directly to blame: they are the only (legal) commissioners, purchasers and licensors of new military systems, weapons and equipment; there is no open and free commercial market in defence in which to invest on speculative business ventures.

The extent to which in even the limited commitment to the Ukrainian proxy campaign NATO arsenals have been quickly denuded of missiles, artillery ammunition and weapons has caused deep alarm in defence circles, but clearly not enough in political ones. Replacement production is well short of demand. Were the Russians to chance their arm and invade a NATO member in the foreseeable future, NATO would have to bring overwhelming force to bear and very quickly, possibly including a nuclear response, to achieve a rapid victory: what is clear is that unless there is a significant increase in the capacity to produce arms and munitions, it will have great difficulty sustaining a long, drawn-out conventional slugging match.

The menu of procurement choices: Different from the industrialised warfare of the first two world wars, modern integrated weapons systems (particularly aircraft and ships) are not only exceedingly costly but of such technological complexity and often including foreign partners that upscaling to mass production is very difficult, not only to get up to critical mass in the first place but also to replace kit as fast as it is lost. There is no quick fix. Indeed the CEO of one of Germany’s leading defence companies, Rheinmetall, said even if immediate remedial action were taken of the size required, it would be a minimum of 10 years before Europe was able to defend itself independently of the USA.

Using the analogy of buying a new suit, defence procurement follows three broad headings:

• Off the peg: you choose to buy a ready-made solution. Good current examples of British acquisitions include: the fifth generation F-35 stealth fighter, dubbed ‘Lightning II’ by the British, sourced from Lockheed Martin of the US; A400M ‘Atlas’ medium-lift RAF transports bought from Airbus; C-17 ‘Globemaster’ heavy lift RAF transports leased from Boeing. The advantages are that depending on order books, transactions and delivery can be relatively quickly expedited; the kit has been tried and tested by others and most of the bugs ironed out; spares and after service will be part of the contract. The disadvantages include limitations or conditions being placed on usage or disposal; in the event of quickly needing replacements and spares when heavily engaged in a conflict situation, there is insecurity in the pecking order as to who is served first. Technological security is a shared concept rather than a national privilege. 
• Made to measure: a ready-made platform which is then adapted to your own specifications. Here a good example is the British Army’s new Boxer armoured personnel carrier (APC) due in service in 2025/6 where the basic eight-wheel chassis and power train are being adapted to modify the APC’s body and interior into a command vehicle, an ambulance, a repair and recovery vehicle etc. It is a vehicle designed in Germany by ARTEC GmbH that will be manufactured/assembled in the UK under licence. Advantages of Made to Measure are a good degree of specific tailoring to your own needs and that the basic development risk has been borne elsewhere; the downside is that significantly amending an existing platform is almost invariably more troublesome than imagined and the system doesn’t do quite what was hoped for or expected of it. Same problems with conditions of use, sales to third parties, disposal, spares procurement, security etc as off-the-shelf.
• Fully bespoke: built entirely to your own specification. Here the Prince of Wales class aircraft carriers would be a good example, or at the other end of the scale the Army’s SA80 infantry rifle. The advantage is it’s all yours to do with what you will without reference to others; the disadvantage is that so is all the design, development and build cost, as are any problems that arise from design or manufacturing defects. How far are you prepared to defray/mitigate the costs by selling similar products to third parties with all the inherent risk of loss of secrecy or the product ending up in the wrong hands unintentionally? (SA80 was also a good example of a failure to create commercial benefits from a very basic infantry weapon: it was technically and operationally inferior to and had no price benefit over well-established existing weapons, notably the Russian AK47 and the US M16 ‘Armalite’ carbine; added to which it was so poorly designed and manufactured and had such a miserable reliability record that it was effectively disowned by the Army as useless; later versions are a marked improvement but the commercial reputational damage was done long ago and SA80 remains a weapon for which, unlike its predecessors the Lee Enfield or the Self-Loading Rifle, few have any real affection; hardly rocket science, who would have thought it would require a public inquiry to sort out the procurement, design and manufacturing problems of something as simple as an infantryman’s rifle?).

These simplistic illustrations betray the reality of defence systems: they are often very complex and very expensive. In some cases the expense becomes prohibitive to all but the very biggest economies, or those with nationalised industries, such that international joint ventures are almost inevitable. Fast jets are a prime example. In the West, outside the US, few countries these days can afford the luxury of their own fast combat jet programmes (France is an exception through Dassault). In the RAF in the last 50 years, Jaguar (Anglo French ‘SEPECAT’), Tornado (British, German, Italian JV, ‘Panavia’), Typhoon (British, Italian, German and Spanish ‘Eurofighter’ consortium) and the futuristic Tempest II (British, Italian, Japanese Global Combat Air Programme) were/are all joint ventures; the most recent all-British programme was Harrier which retired in 2014 (flown by the US Marine Corps long after we gave them up; they bought all our cast-offs). Joint ventures help spread the costs but they also come with limitations, especially when one partner has the power to veto a commercial opportunity which might also defray the financial burden: for example Germany prevented the UK seeking orders for Typhoons from Saudi Arabia and vetoed any sales despite Saudi being an officially approved potential Major Non-NATO Ally. A more recent case of operational prohibition was that of British-supplied Storm Shadow long-range missiles for use by the Ukrainians against targets inside Russia: the missile is a joint British/French design but the control and guidance system is American; while Biden refused to allow the use of US ATACM missiles against targets inside Russia for fear of provoking escalation, so he was also able to play the red card limiting the use of Storm Shadow thanks to the guidance system licence.

One of the biggest problems of developing complex, multi-faceted tech solutions which require cross-national integration and cooperation, is retrospectively installing them in or bolting them onto frames and platforms which were not specifically designed for them; this is a particular risk for projects which run over time and need updating along the way because new technological developments have already surpassed the original design brief (e.g. an airborne radar system might already be obsolescent for which the replacement does not fit the aircraft’s original nose cone, or an additional new system housed in an underwing pod interferes with the working of others already installed etc; Nimrod fell foul of precisely this problem).

The more moving parts, the more likely are spanners in the works: The conundrum is balancing need, affordability, capability, commercial opportunity and security and control. The more complex and expensive the system, the greater the number of stakeholders each of which can change its mind at any time. As I describe elsewhere, it is not unusual for a complex defence system to take two decades or more to deliver from the point of inception: in the West, this is four or five electoral cycles and three ‘normal’ economic cycles averaging seven years’ duration. In a case of chicken and egg, the more stakeholders (i.e. governments and their militaries), the greater the likelihood that a defence programme will be subject to specification changes, budget reviews, cost cutting etc. The longer the project takes, the greater the probability it is altered as it transcends another change in a stakeholder government. Every delay and change of mind, even if for the best of intentions, potentially multiplies the cost and then significantly prolongs the project timeline (which in turn renders the system at risk of being obsolescent by the time it enters service). Despite significant investment and irrecoverable sunk costs, some projects end up being aborted, even at the very last minute (e.g. the ill-fated TSR2 multi-role combat aircraft in the 1960s, and CVA-01, the aircraft carrier programme in the 1970s which was supposed to replace the ageing fleet carriers Ark Royal and Eagle until under internecine protest from the RAF, all naval fixed-wing flying was stopped until some genius designed a ski-ramp for the small Invincible Class anti-submarine cruisers allowing Sea Harrier V/STOL aircraft to operate). In the 2010 SDSR in the case of Nimrod MRA4 whose wings David Cameron ordered publicly to be chopped off to make doubly sure the aircraft never took-off, the maritime reconnaissance upgrade was abandoned at the 11th hour before completion despite £4bn of sunk costs being poured down the drain.

Physician heal thyself: In the 2025 SDR terms of reference, the government stipulates that UK defence must be ‘central to economic growth and prosperity’. Assuming that also includes the defence industry, that is entirely in the government’s own control. Defence contractors are constantly investing in innovation of new technologies, systems and platforms, not only weapons but other essential items of military kit. But the government is the only customer; and when it comes to exports, it is the government which grants licences and lays down conditions of sale. No private, non-nationalised defence contractor is going to invest in extra production capacity unless there are guaranteed orders to fill it. To repudiate Wallace’s expenditure conundrum, in fact there is a clear logical commercial sequence here: government orders underwrite industrial capacity investment which ensures timely delivery assuming no design variations. If the government is serious about defence participating in growth, it must therefore order more from UK contractors; to get the best bang for buck for the military, and the best value for money for the taxpayer, the entire procurement process needs fundamental reform. But make no mistake, while the military is perfectly capable of creating its own friction both in terms of cost and time, the most culpable culprit in the entire chain is the government itself.

In its 2024 manifesto, Labour was explicit that it wants all UK naval shipbuilding to be undertaken in UK yards; it inherits the Tories’ National Ship Building Strategy developed in 2017 and ‘refreshed’ in 2022. The NSBS remains committed to a frigate and destroyer fleet of 19 warships. As discussed, we currently operate 14; the reality is there is a clearly defined need for three times that. Restoration of the Royal Fleet Auxiliary logistics quota would also render the aircraft carrier programme being closer to worthwhile rather than the white elephant it has become. Naval ship-building capacity needs to double while the build and delivery times need to halve. The new 6,900 ton Royal Navy Type 26 frigate, HMS Glasgow, assuming fully commissioned in 2028, will have taken 11 years in building and completion. China has just launched a 50,000 ton amphibious assault ship, Sechuan, the largest in the world, which from a paper concept to being in the water took four years;  85 years ago, HMS Prince of Wales, a brand new design for a 36,000 ton battleship incorporating the latest technology including radar and computerised gunnery, was laid down in January 1937, launched in March 1939 and was operational early in 1941; we could do it then, we need to be able to do it now. That Prince of Wales was sunk in December 1941 is beside the point: over eight decades ago we could build big, complex ships quickly and efficiently; it must be the aim to emulate similar turnaround times.

However it is achieved and wherever weapons and arms are sourced, what must happen is facilitating the ability rapidly to upscale production, and significantly to improve delivery times. Logically the answer should lie with British manufacturers, but unlike the mid-1930s when even despite de-militarisation programmes the UK had one of the biggest armament industries in the world, that is not the case today. Short-term expediency points to having to buy more off-the-peg or made-to-measure equipment. But the medium-term plan in line with the SDR’s purpose must be to rebuild a vibrant and versatile UK defence industry. National governments are the commissioners, guarantors, licensors and customers: it is entirely in their own hands to determine that outcome. As the providers of expansionary capital, the investment community has a very active role to play, not least that if fair returns on the capital employed are achievable and allowable, there will be a greater willingness to reinvest producing a virtuous circle.

Conclusion

Defence and national security are complex, multi-faceted and dynamic problems. Where we are today is as a result of policies which have evolved over three decades. Today’s is not a happy picture. However, there is hope and it is not too late to give our armed services a proper fighting chance. But it does require a significantly different political approach and the willingness to fund it. It is a leap of faith in our leaders but a constructive, proactive and pragmatic approach has to be better than simply keeping our collective fingers and toes crossed that it will all be all right on the night. We need to get it right. Even if it is only to prove a negative: our defence strategy worked because we did not have a war. Amen to that.

Footnotes

¹The rate of interest or income on an investment, usually expressed as a percentage.
²Strategic Defence Review 2024-2025: Terms of reference - GOV.UK
³“Article 5 provides that if a NATO Ally is the victim of an armed attack, each and every other member of the Alliance will consider this act of violence as an armed attack against all members and will take the actions it deems necessary to assist the Ally attacked.” Source: NATO - Topic: Collective defence and Article 5
⁴The YouGov Big Survey on NATO and war: Americans on defense and reasons to go to war | YouGov
⁵Milestones in the History of U.S. Foreign Relations - Office of the Historian