Tuesday, October 19, 2010

Impact of Blair's wars on the UK deficit

The US has spent over a trillion dollars on war since 2001. A million million dollars.

The numbers are up on this excellent site here.

How much have we in the UK spent on wars since 2001? I had a desultory poke around, as here on the MoD website. Nada. Likewise nothing in the The Strategic Defence and Security Review.

It is almost as if they do not want us to know the cost of the wars.

The stop the War site quotes £5bn/y in Afghanistan.

So we have to make our own calculations. I found this chart of UK defence spending on the UK Public Spending  site. If you look at the chart, it shows defence spending on a gradual upward trend until 1994, then falling slightly until 1998, then rising under Labour, on a steeper upward trend since 2001.

Now if we take the £30bn/y as a baseline, which leaves out the first 3 years of Afghan war, we can count an excess of £60bn above that line.

Knock £10 billion off to allow for the historic upward trend in defence spending, and we arrive at a cost of £50 billion for the wars since 2001 - say £5 bn a year, which is in the same ball park as the StW figure, but that was for only one war. So put the £10 billion back in.

And £60 billion would put our financial commitment to the Bush/Bliar adventures in Iraq and  Afghanistan at just 6% of US expenditure, which would seem about right, maybe.

So, say the total cost of the Blair wars to date is £60 billion, which is about 7% of the total National Debt, or 8% of the £743bn National Debt we would have had were it not for the Bank Bailout.

Initially, I thought that without Blair's dog-like devotion to Bush, Osborne would only be seeking to find £20 billion of savings, rather than £80 billion.

But I was wrong. I am not an accountant, thank all the gods, and I confused the national debt with the budget deficit, which is money spent minus money collected in taxes. The relevant part of outgoings is the interest payments on the national debt, which is about £42 billion a year.

If the £60 bn on Blair's wars were all paid for by borrowing, 7% of £42 billion is £2.94bn.
So we are paying nearly £3 billion for Blair's wars, for how ever long it takes to pay off debt.
A long time anyways.
If we are paying 42 a year on 850 debt, I make that 20% interest, though I could be wrong. I am a non-accountant doing accountants' work because the accountants do not appear to want to ask the right questions.

Two things are certain.
  1. The cost of the Blair wars to the UK is not a well publicised figure
  2. They are a significant component of the economic grief that is about to come upon us.
Take-home thought  - every time Osborne and Cameron intone the mantra "This is all Labour's fault", they should also add, "But we accept our responsibility for backing Blair's bloody, costly and damaging wars".

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