Memorandum submitted by Professor Malcolm
Chalmers (October 2002)
This memorandum focuses on two aspects of the
New Chapter: priorities and resources. It argues that the New
Chapter continues the trends in defence priorities that have been
in place since before the SDR, and will further consolidate the
UK's position as one of Europe's two leading military powers.
It also suggests that the government will soon have to make difficult
decisions to reduce commitments in some other areas of capability
if it is to be able to provide the resources necessary to support
New Chapter priorities.
Although work on a New Chapter of the Strategic
Defence Review was ordered as a direct response to the events
of 11 September 2001, the resulting review has ranged much more
widely, looking at the underlying planning assumptions and priorities
that underpin the UK's defence posture and plans. It has therefore
been an opportunity to learn from the lessons of operations in
Afghanistan, and other developments since SDR in 1998, without
the upheaval that would be involved in a full scale Defence Review.
The need to give higher priority to responding
to international terrorist threats has been an important part
of the work, most clearly in relation to proposed enhancements
in homeland defence. But most of the proposed enhancements in
capabilities have a wider relevance for expeditionary warfare.
As a consequence:
even if international terrorism turns out not
to be an enduring challenge, we will not be taking our forces
and capabilities up a strategic "dead end". (New Chapter,
Indeed, it is the priority given to improving
capabilities for conducting several simultaneous, long range military
operations, rather than the particular requirements of counter-terrorism
per se, that is at the heart of the New Chapter's conclusions.
In essence, it can be seen as an update to the 1998 Strategic
Defence Review, taking into account both (a) the lessons of operations
over the last four years (including Afghanistan); and (b) the
rapid pace of technological development, and the consequent opening
up of new possibilities for "network-centric" warfare.
The full procurement implications of the New
Chapter, and the 2002 Spending Review settlement, have not yet
been made public. A high priority is to be given to investments
that can enhance "network-centric capability", including
(for example) battlefield reconnaisance, command and communications,
precision attack, and (both unarmed and armed) unmanned air vehicles.
Additional investment in special forces is promised. The review
has signalled an increased emphasis on rapidly deployable light
forces, including the equipment (support helicopters, air-transportable
armoured vehicles) they require. It has also reconfirmed the importance
being given to strategic lift and sustainability.
The period since the SDR has seen requirements
for the armed forces to be deployed at short notice on more simultaneous,
or near-simultaneous, operations than had been envisaged in 1998.
These operations have tended to be relatively small-scale (eg
Sierra Leone, Macedonia, the two Iraqi no-fly-zones, and Afghanistan),
but very demanding in their requirements for deployed logistical
support, communications, and mobile command and control. The ability
to rapidly deploy small but highly effective forces has been key
to the success of these operations. The New Chapter assumes that
such smaller scale, rapid response, operations will continue to
place considerable demands on the armed forces; and argues that
the UK should enhance its capabilities to respond to these demands.
Playing to the UK's strengths
The proposals in the New Chapter are designed
to play to the UK's strengths, focusing military energies in areas
where it has capabilities which few others possess. The UK is
one of only three powers (along with the US and France) with a
capability for rapidly projecting military power over long distances
at the early stages of developing crises, and the aim of the New
Chapter is to further develop this "comparative advantage".
Precisely because this capability is held by so few, it can provide
the UK with relatively unique influence in collective discussions
of security policy in NATO, the EU, and/or the UN. It may also
increase the UK's ability to shape the political outcome of any
crisis in pursuance of national values and interests. In Kosovo
in 1999, for example, the fact that UK forces were the first NATO
forces to reach Pristina played an important role in preventing
a more confrontational approach to the Russian forces deployed
at the airport.
The US is able to conduct almost any conceivable
operation without military assistance from the UK or anybody else.
Consequently, the opportunities for allied influence on the objectives
and conduct of US operations should not be overstated, and have
declined further under the current administration. Nevertheless,
many US leaders continue to value the enhanced political legitimacy
which coalition operations bring, both domestically and in the
international community. While this remains the case, the UK's
military assets give it an opportunity for influence which other
states may not have. Increased investment in "network centric"
capabilities in particular may enhance the attractiveness of UK
support to the US armed forces, although this will remain critically
dependent on the extent to which UK-purchased systems are compatible
with those of their US counterparts.
By giving a high priority to the improvement
of "enabling assets", the New Chapter enhances the UK's
ability to conduct operationally and logistically self-supporting
operations, reducing the extent to which its forces are obliged
to depend on others (including the US) for logistical and other
support. It may thus become more able to conduct small scale UK-only
operations, such as the Sierra Leone deployment, even when no
other Western power has the will and capability to intervene.
It also helps to improve the UK's ability to play a leading role
in the command and support of small and medium scale European-led
operations. Whether conducted under an EU or NATO flag, such operations
are likely to become increasingly common in the Balkans, and perhaps
also elsewhere, as the US's priorities shift outside Europe.
Yet all priorities comes at a price. In order
to provide the resources necessary to support the New Chapter's
plans, lower priority capabilities and operations will have to
be curtailed. The armed forces have neither the personnel, nor
the financial resources, to meet all the demands that could now
be placed upon them. The UK already deploys a much higher proportion
of its armed forces overseas than other countries, and the resulting
strains on personnel morale and retention are widely acknowledged.
At the same time, service personnel numbers have continued to
fall since the Strategic Defence Review, from 214,300 in 1998
to 210,800 in 2002. The number of civilian support personnel has
fallen more rapidly, from 104,200 in 1998 to 97,300 in 2002.
One way in which the MoD has been able to cope
with these pressures has been to reduce the level of forces deployed
in semi-permanent commitments. Although it remains the MoD's largest
peacetime commitment, the number of service personnel permanently
committed to Northern Ireland has fallen from 17,500 in 1998 to
14,600 in 2002.
There has also been an increased commitment to hand over peace
support responsibilities to allies after the first crucial months
of interventions. In both Bosnia and Kosovo, the size of the UK
garrison peaked immediately after the initial intervention. Reflecting
its comparative advantages compared with its European allies,
the UK provided the largest single European contribution to both
the first IFOR (Bosnia) and KFOR (Kosovo) contingents. Since these
initial interventions, however, the British contribution to subsequent
phases of Balkan peace support operations has declined, and that
of other European forces has increased. Similarly, the UK provided
the leadership for the ISAF force in Kabul in the first months
of 2002, but then handed over leadership to Turkey and began to
reduce the size of its military presence. In both cases, the pattern
has been for the UK to reduce its own contributions as soon as
others are ready to take over, releasing scarce rapid-reaction
capabilities for use elsewhere. In all three of these cases, the
UK has continued to provide some forces, but at a lower level
This is a delicate balancing act. It relies
on the willingness of other states to take over commitment that
have initially been assumed by the UK. Yet, unless there are enough
allies that are both prepared and able to take on the roles that
are necessary to ensure post-conflict stabilisation, it risks
leaving key peace support operations undersupported at a time
when they need to be strengthened (and as UK forces move on to
the next mission). Perhaps the most obvious example of this dilemma
is in Afghanistan, where the failure of the international community
to expand the remit of ISAF beyond Kabul has been widely criticised,
both within Afghanistan and by international agencies. It makes
it more difficult to rejuvenate the national economy, and increases
the risk of a collapse of the Karzai regime, with all the devastating
effects that this could have, both for the welfare of the Afghan
people and for the success of efforts to curb al-Qaeda activities
in the region.
Such an expansion could not be undertaken without
substantial commitments from those countries (including the UK)
which have the capability to do so; and the UK is not the only
European country that is concerned at the prospect of an open-ended
commitment of forces to Afghan security. Yet the UK is seeking
to reduce the size of its commitment more rapidly than it did
in either Bosnia or Kosovo, despite having had less success in
improving the security situation, and with less prospect of persuading
allies to take over the UK's share of the peace support burden.
The commitment of Germany and the Netherlands to lead ISAF after
Turkey is welcome. Given the severity of the security problems
still facing Afghanistan, however, one hopes that the withdrawal
of most UK forces may not soon be seen as a tragic example of
the limits of a "rapidly in, rapidly out" approach to
The viability of the policy direction mapped
out in the new Chapter could also soon be vulnerable to a more
fundamental challenge, in the shape of a new requirement to occupy
a post-war Iraq. As in the Balkans and Afghanistan, the UK is
almost certain to play the most prominent European role in supporting
any US military campaign to topple Saddam Hussein's regime. In
contrast to those previous conflicts, however, it is much less
clear that European allies will have either the resources or the
desire to share the burdens of post-conflict occupation with the
UK and the US. If British troops enter Iraq, they could be there
for a long time.
The UK compared
The latest MoD-published figures show the UK
as spending slightly less on defence than France and slightly
more than Germany: making it the world's fifth largest military
Yet these data conceal the considerable gap that has now opened
up between the UK and its main European allies, both in the volume
of resources devoted to defence and in the useable capability
that is being generated from these national efforts.
One reason for this discrepancy is that official
comparisons rely on NATO defence spending figures that include
large amounts spent on two itemspensions and paramilitary
forces - that figure much more prominently in the budgets of other
European countries, but which do not contribute to current military
capability. Table 1 recalculates the defence budgets of the four
largest European countries excluding these items. It shows that,
at current exchange rates, the UK now spends around 50% more on
defence in absolute terms than either France or Germany, and more
than twice as much as Italy. It would take a sterling devaluation
of a third for the UK's euro-denominated defence budget to be
equivalent to France's.
Moreover, raw spending totals probably understate
the capability gap between the UK and its major European allies.
During the Cold War, both history and geographical position led
the UK to maintain a defence posture better suited to expeditionary
warfare than its continental allies: a large ocean-going Navy
with worldwide bases, and an Army and Air Force designed for forward
defence outside national territory. Defence reforms begun in 1990
further reinforced the UK's comparative advantage, reducing redundant
capabilities for large-scale warfighting while continuing high
levels of investment in new equipment and other assets. By contrast,
a large part of allies' budgets continued to be devoted to maintaining
large armies configured primarily for territorial defence, despite
the disappearance of any credible threat of invasion. The commitment
to maintain conscription has also, at least until very recently,
constrained the pace of reform.
This structural difference between the UK and
its European allies can perhaps be most clearly illustrated by
comparing levels of spending per serviceperson. The UK has fewer
personnel in its armed forces than any of the three other major
European powers (it only has a few thousand more than Poland).
But it makes up for this deficit by spending
176,000 on defence for every person in its forces,
79,000 in Germany and
74,000 in Italy. Even France, which no longer has
conscripts in its armed forces, spends only
98,000 per serviceperson. (The US, by comparison,
spends around $250,000 per head). In contrast to the undercapitalisation
and lower productivity that still characterise many parts of the
UK civil economy, therefore, UK servicemen and women are more
fully supported by support and equipment spending than their continental
counterparts. Moreover, because these figures are on a non-RAB
cash basis, they do not take into account the additional advantages
that the UK armed forces would receive if account were also taken
of the cumulative effect of past defence investments.
Nor do spending trends in European allies suggest
that the gap in capabilities will narrow dramatically in the near
future. Although France has committed itself to real term increases
in defence spending, further cuts in German spending seem probable.
In most of Europe, a combination of slow economic growth and widening
budget deficits severely constrains the ability of any spending
ministry to obtain new resources.
The UK has a substantial stake in ensuring that,
despite these tight budgetary limits, the pace of military reform
in allied countries is accelerated. As discussed above, the long-term
value of UK military operations often depends on the ability of
allied forces to provide a high proportion of follow-on forces
for peace support and related missions. This ability has been
demonstrated in the Balkans; but is less in evidence in the operationally
more challenging environment of Afghanistppan. The more that the
UK becomes involved in operations without substantial contributions
from other Europeans, however, the more dependent it will become
(operationally and politically) on US priorities rather than those
developed collectively by a broader coalition of states.
The 2002 Spending Review
The additional investments outlined in the New
Chapter are to be financed from the budgets set out in the Spending
Review published in July 2002. Between 2002-03 and 2005-06, real
defence spending (in resource accounting terms) is due to grow
by an average 1.2% per annum. Calculated in near-cash terms (equivalent
to old pre-RAB budgets), the increase is rather greater: 1.7%
per annum in real terms.
Yet this apparent change in trend does have
to be severely qualified before wider conclusions can be drawn:
First, the increase from 2002-2003
onwards comes after a 4.6% fall in defence spending between 2001-2002
and 2002-2003. As a consequence, planned 2005-2006 spending will
still be lower in real terms than in 2001-2002 (see Table 2).
Second, the increase for defence
after 2002-2003 takes place in the context of a very generous
overall spending settlement. Total departmental (DEL) spending
is due to rise by 5.2% per annum in real terms over these three
years, with particularly generous rates of increase for transport
(12.1%), international development (8.1%), health (7.3%), education
(5.7%) and the Home Office (5.6%). As a consequence, the relative
priority given to defence, compared with other areas of government
spending, will continue to decline: from 7.7% of total managed
expenditure (TME) in 2001/02 to 7.0% in 2002-03 and 6.4% in 2005-06.
This compares with a reduction (on a pre-RAB basis) from 6.5%
of TME in 1997-98 to 6.1% in 2001-02.
While UK plans for defence spending appear relatively
generous compared with those of its European partners, they still
represent a marked reduction in the priority given to defence
within overall government spending. Unless the government is willing
to countenance further substantial increases in taxation and/or
borrowing, the rate of growth in total state spending will probably
slow sharply after 2005-06. As a consequence, the government may
have to make much harder choices on defence priorities in the
aftermath of the 2004 Spending Review than it has to make in 2002.
Over the last five years, the government has
been able to shift defence resources into higher-priority areas
while making only incremental reductions in other aspects of defence
capability. This approach has been politically attractive, helping
to avoid the controversy that would attend larger cutbacks in
front-line forces or major procurement programmes. If the defence
budget were to come under greater scrutiny as part of a less generous
future spending review, however, this delicate balancing act may
not be sustainable.
Such a review of defence priorities may in any
case be inevitable as the costs of providing "network-centric'
capabilities increase. The New Chapter hints at the likelihood
of further reductions in the size of the front line in some areas.
As resources shift from firepower towards mobility, communications
and other force multipliers, it suggests that it is increasingly
"less useful to measure combat power in crude terms of numbers
of platforms and people."
The tighter the budgetary settlement for defence
is, the more rapid and difficult the decisions on where to economise
will have to be. At the centre of such a review is likely to be
the need to think through the implications of the further reduction
in the risk of large scale conflict in Europe that, the New Chapter
concedes, has taken place since 1998.
How far are current force structures and plans still a legacy
of past Cold War requirements? And how far can the size and expense
of these structures and plans be reduced without harming the capabilities
necessary to meet new threats?
The Army seems more secure from cutbacks in
this respect than the other services. The SDR requirement to undertake
a single major offensive ground operation (comparable in size
and duration to the UK's 1990-91 Gulf War contribution) seems
likely to remain a priority, since recent events (including the
possibility of a European-led ground campaign against Serbia in
1999 and the current reported plans for an invasion of Iraq) have
demonstrated the continuing relevance of such a capability. But
the forces that can most effectively generate this military effect
will change over time as new technologies and capabilities enter
service. In addition, the New Chapter has made clear that further
reorientation of the Army's warfighting capability towards more
mobile and lighter forces is planned. The MoD will want to ensure
that, as far as possible, Army major war capabilities can also
be effective in the smaller scale operations that the New Chapter
argues are becoming increasingly common. This might signal, for
example, a further shift of emphasis towards the use of helicopters
in anti-armour warfare once the Apache is fully operational.
In the Royal Navy, the increased requirement
to be able to conduct operations outside Europe, often with limited
access to local infrastructure, will strengthen the case for continuing
with the planned purchase of two large aircraft carriers, for
entry into service around 2012. Capabilities for projecting power
into land will also be improved by the entry into service of two
new LPD (Landing Platform Dock) ships and four new Bay class amphibious
landing ships. But the RN could come under pressure to release
resources (money and personnel) for these priority programmes
by further reductions in the size of its 32-strong frigate and
destroyer fleet and its 12-strong attack submarine fleet (much
of the latter is currently in refit). Some reduction in both these
areas was already ordered as part of the SDR. But the further
decline in the priority accorded to anti-submarine warfare, together
with the lessened threat of conflict in the Falklands, may allow
further reductions to be made. With both the Type 45 destroyer
and the Astute class SSN due to provide a step-change in capability
compared to the systems they will soon be replacing, overall capability
might (depending on the measure used) be improved even if numerical
strength is reduced.
Perhaps the greatest scrutiny will be accorded
to plans for aircraft procurement, the cumulative costs of which
dominate the future equipment budget. In the past, massive sums
have been expended on aircraft that have become obsolescent before,
or soon after, they have entered service (as in the case of the
Tornado F3). The government will be keen to ensure that this experience
is not repeated over the next decade, when three major programmes
are currently at various phases of production, development or
the planned purchase of 232 Typhoon
aircraft at an estimated cost of £19 billion, with Tornado
F3 and Jaguar aircraft due to be progressively replaced in operational
squadrons from 2004 onwards;
the plan to buy up to 150 F-35's
to replace RAF Harriers and RN Sea Harriers from 2012, at an estimated
total cost of £10 billion;
the continuing requirement to replace
the Tornado GR4 strike aircraft with a Future Offensive Air System
(FOAS) from 2015.
It is difficult to see how all these programmes
can be afforded, especially on timescales that suggest that all
three could require substantial funding from the MoD in the latter
part of this decade. One possibility might be to reduce the size
of the second and third tranche of Typhoon orders, due to be signed
in 2003 and 2007. The Typhoon is optimised for air superiority,
and this role is now of lower priority, given that few if any
potential opponents have capable modern air forces (in contrast
to the 1980's when the Typhoon was first conceived). Alternatively,
after taking account of both the contractual penalties involved
and the technical possibilities, some planned Typhoons might be
re-configured to replace Tornado GR4 in the offensive role (as
is already planned in the Luftwaffe). The new capabilities demonstrated
by unmanned air vehicles, most recently in Afghanistan, also open
up new (and perhaps more economic) FOAS possibilities.
Yet the extent of the potential "funding
crisis" should not be overstated. Some analysts still assume
that there is a rate of defence-specific inflation, like that
for health or other public services, which is inevitably higher
than general inflation; and that, as a consequence, more needs
to be spent on defence in real terms every year in order to preserve
existing capabilities. They point to the tendency of wages to
rise faster than inflation, reflecting the need to recruit and
retain an increasingly more professional workforce, as well as
the historic tendency for the real unit costs of major weapon
systems to greatly exceed the systems that they replace.
There is some evidence to suggest that the rate
of equipment cost escalation may have slowed down since the pressure
of the Cold War arms race was removed. More fundamentally, this
argument understates both: (a) the extent to which new weapon
systems and new "force multipliers" allow qualitative
improvements in defence capability; and (b) the increased productivity
levels that accompany higher real wages, allowing many tasks to
be performed with fewer (but better paid) personnel than in the
past. It is true that, if defence capability is measured solely
in terms of numbers of personnel and front-line weapon systems,
then it is almost certain to decline further over the next decade.
But, as in most innovative and capital-intensive sectors of the
civil economy, new technologies increasingly allow more defence
capability to be provided with fewer people and platforms. Improved
capabilities for logistic support and network-centric warfare,
for example, are making it possible to provide the same front-line
"punch" with a far smaller force package, including
fewer personnel, than would previously have been required.
The New Chapter makes a good case for continuing
the process of reorienting the armed forces towards new missions
and new priorities, building on the UK's comparative advantage
as the European power best equipped for expeditionary operations.
If the ambitious foreign policy goals which underpin it are to
be realised, however, it will increase the UK's reliance on other
countries (especially European allies) to provide the complementary
capabilities (e.g. in peace support) which the UK will be less
able to provide. Given the budgetary restraints under which the
MoD must operate, moreover, the fulfilment of New Chapter priorities
will soon require difficult decisions to be made to reduce the
cost and size of lower-priority capabilities and programmes.
EUROPEAN DEFENCE BUDGETS 2002 IN
Note: Excludes spending on pensions, gendarmerie and
carabinieri. The UK figure is for 2002-2003 on a near-cash DEL
basis at an exchange rate of
1.58 = £1, and excludes notional pension contributions.
UK DEL SPENDING ON DEFENCE IN REAL TERMS (2002/03 PRICES)
|2001-02 Provisional outturn||£30.7 billion
|2002-03 Plan||£29.3 billion
|2003-04 Plan||£30.2 billion
|2004-05 Plan||£30.2 billion
|2005-06 Plan||£30.4 billion
Source: HM Treasury, 2002 Spending Review,
Annex A, Table A.4.
Note: These figures are on a RAB basis and are therefore
not comparable with those in Table 1.
The civilian personnel figure for 2002 includes 8,000 transferred
to QinetiQ in 2001. Defence Statistics 2002, Table 2.1. Back
Defence Statistics 2002, Introduction to Chapter 2. Back
Defence Statistics 2002, Table 1.18. 2001 levels, calculated
in 1998 prices and exchange rates, as published by the Stockholm
International Peace Research Institute. Russia's place as the
world's second largest spender is based on the questionable use
of a "purchasing power parity" conversion factor for
Russia alone. If market exchange rates are used, Russia spent
$12.7 billion on defence, ranking it only 12th in the world (behind
Defence Statistics 2002, Table 1.2. Back
New Chapter, paragraph 41. Back
New Chapter, paragraph 91. Back
For an excellent exposition of this argument, see Michael Alexander
and Timothy Garden, "The arithmetic of defence policy",
International Affairs, 77, 3, July 2001, pp 509-530. Back