FORMER European Central Bank boss Mario Draghi told the European Commission this week — in a “competitiveness” report tasked with tackling the continent’s mounting economic problems — that a €800 billion cash injection was needed. And in a key section, he argued for a shift from buying US armaments to favouring arms manufacture in the EU.
He told the commission that 78 per cent of the €75bn that EU states splashed out on military spending last year went elsewhere with 63 per cent going to the bloated US arms economy.
He didn’t say it but last year Britain’s defence industry won £12bn in overseas orders with 22 per cent from European countries.
In June last year the government responded to the parliamentary defence committee report to say of the British-US military relationship: “…we co-operate to an unprecedented degree across the full spectrum of defence business.”
Labour in government is following the Tory policies. In the 2023-24 financial year, Britain spent £54.2bn on defence. This is expected to rise to £57.1bn in 2024-25, which is a 4.5 per cent increase in real terms and a few weeks ago Keir Starmer pledged to spend an extra £3bn a year on arms for Ukraine “for as long as it takes.”
The Audit Office says that to replace arms already sent to Ukraine would cost £2.71bn in addition to the £7.8bn already committed.
This means big profits for defence contractors, with almost all of it coming from taxpayers’ pockets.
In 2023 US defence industry profits rose to $829bn and Draghi wants European defence industries to get a bigger slice.
Outside the EU, but as a member of Nato, Britain is committed to spending 2 per cent of GDP on defence expenditure. Last year, according to Nato, Britain went further and spent an estimated 2.3 per cent of GDP on defence.
A key job for Britain — inside the EU — was once to keep a watching brief on US interests which, given the high levels of inter-penetration between the US and British economies, especially in banking and arms and aerospace manufacture, was thus seen by our elites as an absolute priority. (This is why Bomber Obama was so keen to intervene in the referendum debate.)
Where our ruling class in its majority then saw the relationship with the US as friendship “with benefits” today — outside the EU — they overcompensate and see it as something even more intimate and this is reflected in the Aukus treaty which formalises the global reach of Anglophone defence and intelligence co-operation.
The thing about arms production is that it all rusts unproductively or goes up in smoke. Nothing of value — aside from the consumption that arises from wages entering the economy and the demand for energy and materials entailed in its production — comes out of it. Contrast this to the economic benefits of building, houses, hospitals, schools or a railway or a merchant ship.
There is a sort of benefit for the people directly involved in arms production but, as well as the death and destruction, the profits arising from arms production come as a burden on everyone else and on society in general.
To the corruption that inevitably accompanies arms sales and its profit-seeking functionaries can be added the political corruption that taints everyone involved in arms production for the imperial wars that have disfigured this century and the last and to which Starmer, Defence Secretary John Healey, Foreign Secretary David Lammy are as committed as their Tory and New Labour predecessors.
