Many people are surprised and disappointed by Keir Starmer’s Labour government. Yet, it is a typical Labour government. Fundamentally, it is a belief in state action to co-ordinate the market economy that characterises them in power. Thankfully, any association between this belief and socialism has long since been dispelled.
Indeed, to their credit, this government is faithfully carrying out the objects set out in the Labour Party’s rulebook, which commits the Party to work for:
‘A DYNAMIC ECONOMY, serving the public interest, in which the enterprise of the market and the rigour of competition are joined with the forces of partnership and cooperation to produce the wealth the nation needs and the opportunity for all to work and prosper with a thriving private sector and high-quality public services where those undertakings essential to the common good are either owned by the public or accountable to them’ (Clause IV.2.A).
And:
‘Labour is committed to the defence and security of the British people and to cooperating in European institutions, the United Nations, the Commonwealth and other international bodies to secure peace, freedom, democracy, economic security and environmental protection for all’ (Clause IV.3).
No-one can pretend that the present Labourites have not been up-front with this commitment, at least: anyone voting for them without illusions should have known.
We can see this in action in the way that Downing Street announced the UK taking part in the NATO agreement to spend 5 percent of GDP on Defence.
‘Marking a step change with the approach of previous governments, the National Security Strategy directly answers to the concerns of working people, aligning our national security objectives and plans for economic growth in a way not seen since 1945’.
The reference to ‘working people’ is labour-washing this strategy, which will be about making phenomenal amounts of profit for defence contractors and arms manufacturers. As the NATO press release on the agreement notes:
‘Research and development (R&D) costs are included in defence expenditure. R&D costs also include expenditure for those projects that do not successfully lead to production of equipment’.
This is the NATO agreed definition of defence expenditure. The agreement is for this figure to reach 3.5 percent of member states’ GDP, with an additional 1.5 percent of GDP to be spent:
‘annually to inter alia protect critical infrastructure, defend networks, ensure civil preparedness and resilience, innovate, and strengthen the defence industrial base’.
So, NATO states are preparing to fiddle the figures by defining as much as they can as defence expenditure (see for example rumours Italy is looking at designating a transport bridge as defence expenditure).
Of course, the US has long done this, with a substantial veterans benefit system: spending about $300 billion annually, 90 percent of which is split between income support for veterans (including pensions) and medical costs. This is itself part of the economic conscription of workers to fight in the armed forces for the people who own the country.
Starmer’s government wants to use its military spend as part of its drive to generate planned profits for capitalists through that ‘dynamic economy.’ According to the MOD 463,000 jobs (about 1 in 60) are supported by the defence industry (that includes 272,000 jobs supported by military spending – 151,000 directly and 121,000 indirectly) on top of the 181,890 serving military personnel.
However, as the Institute for Government notes:
‘The single largest cost to the MoD is the Defence Nuclear Enterprise, which is responsible for the procurement, maintenance and disposal of the UK’s nuclear submarine fleet. This was allocated 38% of the 2023-2033 Equipment Plan, or 20% of total defence spending’.
That is, maintaining the UK’s capacity to launch a nuclear device at any nation in the world. Interestingly, they also note that:
‘Most additional UK defence funding between 2015/16 and 2023/24 was allocated to capital spending, to acquire or maintain fixed assets like equipment and land. This element of spending increased by 95.5% in real terms over this period’.
Depending on how you count it, the UK is the 5th or 6th biggest-spending military country in the world. This expenditure is necessary to give continued diplomatic clout.
This comes at a cost. Those tens of thousands of service personnel are removed from the workforce and from doing any potentially useful work (neither generating profits for capitalists, nor creating use values for the community).
The jobs and industries supported by defence spending do produce profits for the companies involved, but those profits are essentially transfers from elsewhere, as they are paid for by taxes extracted from the profits of other capitalists.
Defence does bring in some profit. ‘UK arms exports: Statistics’, a House of Commons report from July this year notes that ‘the UK won defence orders worth £14.5 billion in 2023. This is a 39 percent increase in real terms on the previous year’. Over 50 percent of this was aerospace. This would represent a poor return on all that defence investment, but in fact it also reflects the UK geostrategic interests, as shown by where the sales went to:
‘Europe was the largest market for UK defence exports, accounting for 34% of total exports over this period, followed by the Middle East (32%), North America (18%), the Asia Pacific (7%), Latin America and Africa (both 1%). The remaining share (8%) was exported to a mixed or unidentified region’.
There are other defence spin-offs in terms of new technologies. The recently published government document, ‘Defence industrial strategy: making defence an engine for growth’ notes: ‘The Spending Review confirmed that MOD’s research and development budget will be over £2 billion in 2026-27 and will rise each year’. This includes a mandate to spend 10 percent of the MOD’s procurement on novel technologies, including AI-driven solutions.
Finding new and inventive ways to kill people seems a very roundabout way of creating wealth, but it is a way which has to exist in a society characterised by a tiny minority controlling the productive resources at the expense of the majority.
Pik Smeet
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