The UK budget has been described in the press as one designed to create “breathing space” and raises speculation that PM Burnham – who has a huge majority in Parliament but lacks the specific mandate of his own manifesto – may call a snap election some time before 2029.
This would explain the lack of major changes and the scattering of welcome but ultimately inconsequential moves like the reforms to gas energy billing we wrote about in yesterday’s Daily Briefing.
What the budget certainly hasn’t done is pull away from the previous administration’s commitment to war.
Keir Starmer bowed down to Donald Trump’s demand that European countries start massively inflating their war budgets in order to defend ourselves from nebulous threats created or strengthened largely by the actions of Trump.
Starmer committed the UK to decades of war spending that will result in tens of billions of pounds of extra spending on the military. Spending that will come from other public sector budgets.
However, this wasn’t enough for his then defence secretary John Healey, who resigned over what he saw as a low-balling of that commitment. Healey is now the man in charge of the purse strings as Treasurer but now that he has the numbers in front of him appears, perhaps, to have seen the reality of the situation – that war is very, very expensive.
So, announced at the dispatch box yesterday but not really finding purchase in the media, which has focused on another welcome but inconsequential promise to help people with energy bills next year, was a promise tucked into page 96 of the budget to hide those costs of war by introducing public private partnerships (PPPs) into the military.
PPPs have a long history in the UK now. Invented in the early 1990s by the Conservatives but adopted with enthusiasm by Gordon Brown in the late 90s and by devolved Scottish administrations since then (including the current SNP Government) they “solved” the problem of massive public infrastructure debts by taking the debts “off book”. Rather than borrowing or spending money to build a hospital or a school, the Government could contract a private company to do the construction and then to own the asset, but then rent it from them.
It was a disaster. The rents (as well as additional “administration charges” that covered everything down to changing lightbulbs) resulted in government administrations paying many times the cost for the building than they would have had they built and maintained it themselves. Much of that rent was siphoned off into tax havens as even when the initial contracts were given to companies that weren’t based in tax havens, either the contracts or the companies themselves could be sold on to companies that were. Applying regulations or jurisdiction to this tangled web of finance was impossible and companies were incentivised to build cheap in order to maximise profits. The result was hospitals that sickened patients and schools that fell down.
And now the UK Government wants to repeat the exercise to hide their war budget “off book”. There will apparently be a report later this year on how this will be done but it is likely to involve renovations to existing military bases or the construction of new ones either in the UK or in its post-colonial overseas outposts. If regulating companies involved in healthcare was hard, doing so in a sector that thrives on hiding the money it wastes behind curtains of “national security” is inconceivable.
Common Weal takes a firm stance that money is always better spent doing the things that prevent war – funding diplomacy, investing in aid, forging cooperation and collaboration between people to smooth the frictions that lead to conflict – than it is to fund the wars that we could have prevented. The UK apparently continues to disagree and is now committing to funding its wars in the worst possible way. We’ll all pay the price, sooner or later.