Tensions between the United States and Europe have prompted a rethink about defence spending among European elites. The postwar paradigm saw Uncle Sam pick up the tab for security while the Continentals sunk their treasure into social protection and other political priorities. This suited Europe for as long as their benefactor remained broadly faithful to rules-based global liberalism and didn’t ask too much in return. Donald Trump is faithful only to himself, thinks international norms are for wimps, and sees America’s underwriting of European security as a sugar daddy arrangement. In demanding Greenland, he has read his credit card bill aloud to us and unzipped himself expectantly.
By all means, break with the United States and militarise the European Union, but be prepared for the avalanche of invoices coming your way
It’s not enough to shudder at Trump’s vulgarity and call him names and nor is it sufficient to announce a rethink on spending priorities. Action is required, far-ranging and urgent. We have seen in Ukraine that Europe cannot defend itself without the United States. We could yet see in Greenland that Europe cannot defend itself from the United States. The need for strength and self-reliance has never been more pressing. Question: how do we pay for it?
Aye, there’s the rub. By all means, break with the United States, militarise the European Union, even kick out American military bases if you want, but be prepared for the avalanche of invoices coming your way. Conventional defence; ground, air and naval; nuclear and cyber; satellite and AI; signals intelligence; military espionage and counter-espionage; and the rest. For far too long Europe has been splurging on its house while relying on the neighbour’s security light, and acquiring a security light of its own is going to be costly. We will have to cut our budget for interior design and household goods and put our money into fences, locks and alarms.
That includes here in Britain but, as on the Continent, while there is an appetite among elite actors to separate ourselves from the United States, there is little political will to take the unavoidable spending decisions that come with it. Defence spending is forecast at £62.2 billion for 2025/26, which at 2.4 per cent of GDP meets Nato’s two per cent rule but still lags behind other western European nations like Sweden, Denmark and Norway. Spending would almost have to double to keep up with Poland’s 4.5 per cent, and even that level of investment reflects the heavy reliance on American largesse.
To afford very significant increases in defence expenditure, Britain would likely have to raise taxes and cut spending at the same time. But raises taxes on whom and by what amount? Public debates on taxation invariably reveal strong support for higher taxes, provided those taxes are being paid by someone else, ideally The Rich or The Super Rich. Britain doesn’t have enough who fall into either category to rely solely on tax increases on the higher end of the income scale. Taxes would have to increase on low- and middle-earners too. Is there any party prepared to tell the public that they must pay more taxes to fund defence expenditure that, if the Ministry of Defence does its job properly, they will never see in action?
Even so, tax rises are probably easier to sell than tax rises plus spending reductions. Consider two of the biggest items in state expenditure: welfare and health. Britain is down to spend £334 billion on social security this year, and while any number of polls will confirm the voters’ appetite for slashing benefit spending, things become more complicated when you single out particular benefits. The majority of welfare spending goes on pensioners, with retirees taking up £178 billion in benefits, of which £146 billion is the state pension. No party that hopes to win the next election can afford to make meaningful cuts to this bill. These are the voters Reform is busy recruiting, the Tories are desperately trying to cling onto, and Labour has no desire to mess with after the debacle over winter fuel payments.
The Tories would be more comfortable taking an axe to the £145 billion expenditure on working age and child benefits, the £77 billion on disability and health-related benefits, or the £38 billion on housing support. Again, however, Labour has recent experience of trying to reduce outgoings on welfare and all it caused was ill-feeling and rebelliousness on the backbenches before Number 10 eventually backed down. There is no enthusiasm for reopening that conversation. Reform is in an invidious position in that it still can’t be sure how it will resonate with the electorate ahead of 2029. Nigel Farage’s core supporters are very much cut-all-benefits-except-my-pension types, but big Reform gains in the Midlands and the North could complicate the kind of spending reforms the party’s head of policy envisions.
There are just as many brick walls awaiting the head of any party leader who propose a reining-in of health spending, which is looking like £203 billion this year. It is all but impossible to imagine Labour, Reform, the Tories, or anyone else for that matter championing a cut in spending on the NHS. To do so would invite not only the wrath of the public but threats of medic strikes, elongated waiting lists, and accusations of secret plans to privatise the service. It would simply not be worth the hassle.
So where is the money coming from?
So where is the money coming from? Where is the will to source the cash, to confront the voters and the special interest lobbies, and tell them that we’ve come to the end of Easy Street and are now turning onto Struggle and Sacrifice Lane? The public thinks it has been struggling and sacrificing all this time. It probably can’t imagine the kind of austerity required to fund a robust national defence. Left, right, and centre; politician, pundit and punter – everyone wants to distance ourselves from Trump’s America. No one wants to pay for it. Until that changes in Britain and across Europe we’ll have to reconcile ourselves to giving our sugar daddy whatever he wants.
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