The UK government touts its big increases in military spending – at the expense of overseas aid and the basic needs and dignity of disabled people in the UK – as not only necessary for security, but as a key driver of growth and innovation. CAAT Research Coordinator Dr. Samuel Perlo-Freeman challenges this narrative.
Like virtually all of Europe, the UK is making substantial increases in military spending to counter the potential threat posed by Russian militarism and expansionism, and now also the increase in “global uncertainty”; code for the Trump regime’s upending of decades of US foreign policy in relation to Europe, Russia, and Ukraine, and Trump’s sheer unpredictability. Chancellor Rachel Reeve’s Spring Statement allocated an additional £2.2 billion to the Ministry of Defence in 2025/26, over and above current plans, to rise to £6.4 billion by 2027/28, reaching the manifesto pledge of increasing military spending to 2.5% of GDP. Beyond that, they are aiming to reach 3% of GDP by 2030, the highest level since the early 1990s.
A distinct feature of the UK increases, however, is the choice to fund this additional military spending, pound for pound, through drastic cuts to Overseas Development Assistance (ODA) from 0.5% to 0.3% of GDP. This comes on top of large cuts to ODA by the previous Tory government. This move will certainly cost lives among the world’s most vulnerable populations, and harm global development, ultimately worsening UK security as well. At the same time, the government is slashing benefits for sick and disabled people as a way of “balancing the books”. CAAT has strongly condemned this choice of warfare over welfare.
There are many reasons to question the security rationale for this rush to rearmament – but alongside this argument, the government is peddling the idea that increasing military spending will be a great driver of economic growth and innovation – Rachel Reeves pledged to make the UK a “defence industrial superpower”, and to “put defence at the heart of industrial strategy”. This idea, that military spending is a really good way to boost the economy as a whole, is even more dubious than the claim that it is necessary to defend against Russia. This article aims to dismantle the arguments behind this claim.
The arms industry creates jobs…
First of all, jobs. Does military spending create jobs? Yes, undoubtedly! Jobs in the armed forces itself, and in the arms industry, as well as the MOD civil service (though the government wants to cut those). But the thing is, so does all government spending! Health expenditure creates jobs for nurses, doctors, orderlies, cleaners, construction workers building hospitals, etc. Likewise education spending in schools and universities. Spending on clean energy and other green technologies creates jobs for engineers and scientists, and manufacturing workers across the value chain. Benefits for low income people is also a pretty effective way of creating jobs, as they spend virtually every pound, mostly on UK-produced products and services, creating jobs across the economy.
Basically, there is nothing special or magical about military spending as a creator of jobs. And, as Khem Rogaly of Common Wealth pointed out in the Guardian a couple of weeks ago, is that the numbers we’re talking about are just not enough to move the dial on growth and innovation in a serious way. The MOD’s spending on UK industry and commerce currently supports just 130,000 direct jobs, or 209,000 when the supply chain is factored in, 0.83% of the workforce. Moreover, a significant portion of this is spent on very generic goods and services – utilities, hospitality, financial and IT services, transportation, etc. The jobs that are in manufacturing sectors are less than half the total, though some more may be in high value technical services. The sorts of increases in spending we’re talking about, 0.2-0.7% of GDP, will of course increase these numbers. But the general trend over the decades is that, even when military spending has been increasing, the industry has been shedding jobs, as it becomes ever more high tech and capital intensive.
But there are much better ways to do it!
In fact, as research in the US has consistently found, military spending is a considerably less effective job creator, dollar for dollar, than spending on these other areas mentioned above. The same is true in Europe. A recent study by Greenpeace Europe, which examines the economic impact of spending €1 billion on arms procurement, the environmental sector, health, or education in Germany, Italy and Spain. The study considers first how much of the €1 billion in each sector goes on imports, then looks at input-output tables – what each industry spends with other domestic industries through its supply chain, generating additional employment and economic output. Spending on environmental industries produces the greatest gains in economic output – from €1.752 billion in Germany to €1.900 billion in Italy, compared to just €742 million from arms spending in Italy (with a high share of imports), up to €1.285 billion in Spain. In terms of jobs, the €1b invested in arms produces 6,150 jobs in Germany, just 3,160 in Italy and 6,580 in Spain, compared to 11,360 jobs through the same billion invested in the environment in Germany, 9,960 in Italy, and 11,890 in Spain. Education and health spending are even better job creators, although their output impacts are less, more or less comparable with those of arms spending.
Such a study has not been conducted for the UK, but Germany and Spain, both with strong domestic arms industries and a relatively low share of arms imports, are probably good comparators.
The white heat of technology?
Another argument used for military spending as an engine of growth is that it is a source of innovation. The military will invest in AI! Robotics! Lasers! Space! All sorts of cutting edge stuff! Certainly, in the past, many important technologies were developed originally for military purposes (e.g. radar), or their development was heavily nurtured by the military (e.g. the internet). But that’s not really the way it works now. Basically, civilian R&D, mostly in the private or academic sectors, vastly outstrips military R&D, and is the major driver of technological innovation. Rather than initiating key new technologies, the military is a user of these technologies, adapting them to specific military purposes. The information and communications technology revolution was a civilian revolution, of which the military is now a major user; indeed, due to the long lead time of major weapons systems, the military is typically operating well behind the technological frontier, so that by the time, say, a new combat aircraft takes to the skies in earnest, the tech involved will be many years behind its civilian counterparts.
Insofar as the arms industry does itself innovate, most of this is for very specific military purposes, rather than something that can be harnessed for civilian applications. Developing a combat aircraft will involve a lot of specific new innovation, but mostly this innovation will be useful for producing combat aircraft and other military systems, not for civil aviation or other civilian applications.
Wider benefits
A further reason why other areas of spending are much better for the economy – and more importantly, for human wellbeing as a whole – than military spending, is that the products and services they create far more benefits.
Consider the “digging holes and filling them in again” industry. Spending on this creates jobs, for the workers doing the digging, for the producers of earth-moving machinery, for the supply chain for this industry, and so on. But the holes dug and filled in do nothing for society. Whereas health, education, and environmental spending lead to a healthier and better educated society, or help to tackle climate change, reduce pollution, and provide better protection against natural disasters. All of these things benefit the economy, and also human beings.
Military spending, in contrast, provides little by way of wider societal benefits. Soldiers get training that may be of some value in their later careers; but the planes flying overhead and the ships sailing the seas are not providing any direct economic or social benefit – indeed, they are contributing majorly to environmental pollution, with military activities responsible for around 5.5% of global carbon emissions.
Of course, supporters of higher military spending might respond that it would be pretty harmful for both the economy and human wellbeing to have Russian bombs falling on London and soldiers marching through the street. Military spending is thus the “insurance policy” (not really the best metaphor, as that is something that pays you money if the worst happens), to prevent the ultimate calamity from happening to the country, or our neighbours and allies.
Well, that is bringing us back to the fundamental security argument for military spending. Maybe it is true that higher military spending will reduce the risk of war, though that is highly debatable. But that is very different from the claim by the current government that military spending will also turbocharge the economy. Even if they are helping prevent war, our fleets of ships, aircraft and tanks, and our missile stockpiles are not boosting the economy now. On the contrary, it is spending on health, education, infrastructure, the environment that will “turbocharge” the economy, if anything will.
The implication is that, if we believe we need to spend on the military to ensure security against Russia, then that is one thing, but if the goal is to boost economic dynamism and human wellbeing, then we should spend the minimum on the military that is necessary to achieve this security goal. Any more is simply a waste of resources that would bring far more benefit spent elsewhere.
Conclusion
This brings us full circle back to the primary argument for raising military spending right now – the threat of Russia. That discussion is worthy of a separate article, but I would only note here that, understandable as concerns of this threat are in light of the horrific and unprovoked Russian invasion of Ukraine, there are good reasons to doubt the narrative we are being sold of European ‘defencelessness’ in the face of Russian forces that have been unable to subdue a far smaller Ukraine. Compared to Europe, without the US, Russia has many times fewer people, less military spending, even lesser economic resources as a whole, fewer troops, fewer aircraft, and fewer naval vessels. The claim that Europe needs vastly higher military spending to fend off this threat is very good for the arms industry that wields so much influence over British and European politicians, and is also helpful in getting people to accept a grossly unjust economic arrangement with underfunded public services, but it has little basis in reality.
The question of how much military spending is actually necessary is one that needs open and honest debate, and there may be different opinions among opponents of war and militarism – from those who think zero is the appropriate figure to those who support a genuinely defensive ‘defence’ policy – but one thing that should be made absolutely clear is that there are no side economic benefits to be gained, that would not be greatly exceeded by investing the money in other areas, in particular green technologies, health and education. These other areas of spending would create more jobs, and more direct benefit to society as a whole. In particular, investment in clean energy, energy efficiency, and other green technologies, would not only bring more immediate economic benefits, but would generate more innovation of use to society as a whole, and would most importantly help tackle the single greatest threat to humanity, the unfolding climate catastrophe.
