Welfare or security? UK grapples with a growing dilemma

Every student who has taken an introductory course in economics has encountered the Production Possibility Frontier. This graphical model illustrates how the scarcity of resources forces all governments to make difficult trade-offs between competing priorities. In the classic example, the choice is between “guns and butter” — that is, between security and welfare — because no government can provide unlimited quantities of both.
In recent years, this tension between allocating resources to security and welfare has become even more pronounced in public discourse than it has been for some time. A perfect storm of international crises, including the global pandemic and wars, first in Ukraine and then in the Middle East, alongside other heightened security threats, has resulted in slower economic growth, but also growing pressures to spend more on defense. At the same time, in the West, aging populations and low birth rates, combined with rising anti-migration sentiment, have made resolving the so-called “guns and butter” dilemma even more challenging.
Into the midst of this debate stepped Lord George Robertson last week. Robertson, who served as defense secretary in Tony Blair’s first administration and later as secretary-general of NATO, recently led a senior team that authored the UK’s Strategic Defense Review, published last year. The report argued that the UK’s security is “in peril” due to what it described as “corrosive complacency” toward defense under Keir Starmer’s government. Robertson put it bluntly: “We cannot defend Britain with an ever-expanding welfare budget.” When a highly respected and experienced figure issues such stark warnings, stating that “we are under-prepared, under-insured, and under attack … Britain’s national security is in peril,” it would be unwise to ignore them. However, it would be equally irresponsible not to challenge the binary framing of “warfare vs. welfare” that suggests governments must choose between spending on security or welfare if they wish to ensure the security of the country; and this is not to suggest that there are no difficult choices for the decision-makers.
The peace dividend that followed the end of the Cold War has long since faded. The once-popular notion of an “end of history,” free of wars, famously articulated by Francis Fukuyama, now appears more aspirational, confined to history rather than reflective of current global reality. The UK, like the rest of Europe, faces multiple threats. These have been acknowledged by Britain’s Defense Secretary John Healey, who described them as “more serious and less predictable than at any time since the Cold War,” and cited war in Europe, growing Russian aggression, renewed nuclear risks, and daily cyberattacks. To these can be added terrorism both domestic and international, the misuse of generative AI, and broader geopolitical instability that threatens energy supplies and global trade routes. Such threats demand an adequate response in terms of military size, equipment, technological sophistication, and closer coordination with allies, particularly within NATO and across Europe. The British army’s manpower, however, has been significantly reduced since the end of the Cold War, from around 155,000 troops in four divisions to roughly half that size, while being tasked with ever-increasing missions stretching far and wide and beyond its current capabilities. 

A perfect storm of international crises has resulted in slower economic growth and a growing pressure to spend more on defense.

Yossi Mekelberg

To be sure, efforts are underway to address this. The current government has committed to increasing defense spending to 2.5 percent of gross domestic product by 2030 and increasing it to 3.5 percent by 2035, at an estimated additional cost of £40 billion in today’s prices, and this money needs to come, at least in the short run, from either increasing taxes or cutting public services. Yet simply allocating more funds is not a panacea. Without careful oversight, increased spending can lead to waste, inefficiency, and even corruption. There is also a risk of investing heavily in capabilities suited to past conflicts rather than future challenges. Improving effectiveness does not always require higher expenditure; indeed, military institutions are often prone to inefficiencies, making accountability and proper planning essential.
More concerning, however, is the populist contention that national defense of the realm is being undermined, even compromised, by the scale of welfare spending. This is not to suggest that welfare systems should not be reformed — indeed, like defense, they require constant scrutiny and reassessment. Nevertheless, the welfare state established after the Second World War remains a cornerstone of a healthy society. For this reason in the UK, nearly 11 percent of GDP is spent on healthcare, broadly in line with comparable countries, and, together with education, both account for roughly a quarter of total annual public spending. Much of this expenditure goes toward salaries for medical staff and teachers, any cuts in which would result in serious damage to these essential services. The crisis becomes even more acute as demand for these services continues to rise with both population growth and demographic aging.
Crucially, national security does not benefit from a population that is unhealthy or poorly educated — quite the opposite. One of the UK’s key strengths, shared with many European countries, is its capacity to foster social cohesion and a sense of shared purpose, because this abstract notion called the state ensures its peoples’ well-being. This cohesion is itself a strategic asset, difficult to quantify, but historically invaluable. As modern warfare becomes increasingly technologically sophisticated, a similarly advanced education system and economy are indispensable, and to invest in it is to invest in security.
The simplistic claim that cutting welfare will automatically improve security overlooks the fact that some security threats, particularly those that are homegrown, stem largely from unresolved social issues. More fundamentally, it is sluggish economic growth that constrains both defense and welfare spending, and this is the consequence of weak growth which reflects deep structural problems in the UK economy, compounded by the long-term effects of Brexit. For politicians, it is often easier to shift funds between departments than to address these underlying structural challenges. This temptation is especially strong during periods of crisis and mounting cross-pressures. Yet, to yield to the temptation of short-term fixes would only kick the can further down the road, for it to return at a later date.
The UK is facing a convergence of external threats and internal social challenges. Paradoxically, this moment of crisis also presents an opportunity to dispel the false assumption of a binary choice between security and welfare. In reality, the two are mutually reinforcing rather than inherently contradictory. Achieving both, however, requires a bold agenda focused on sustainable and inclusive economic growth, one that embraces a dynamic, inclusive economy, with some short-term pain for the better off that will pay off in the longer term to ensure, a secure and prosperous society.

• Yossi Mekelberg is professor of international relations and an associate fellow of the MENA Program at Chatham House.
X: @YMekelberg