VOICE OF THE CITY
THE government should have taken more account of the cost of going to war in Libya and must now review its plans to cut defence spending, according to the City A.M./PoliticsHome Voice of the City Panel.
Although a majority of panellists (63 per cent) thought the government was right to go to war in Libya, they had serious concerns about financial planning and the effect of swingeing cuts to the defence budget.
Seventy per cent of the panel said the government should have taken more account of the cost of the war, which is said to have already cost over £200m. Initially the government had said the war would set the exchequer back somewhere in the region of “tens of millions” of pounds.
A similar number of panellists (68 per cent) said the government now needed to review its planned cuts to the defence budget in light of the conflict.
Overall, the UK defence budget will be cut by eight per cent in real terms by the end of the parliament in 2015 and a total of 17,000 jobs will be cut across the three armed forces.
Although the war is being funded from Treasury reserves – not by the Ministry of Defence – it has been suggested that the cuts have made certain operations more expensive than they otherwise would have been.
One panellist said: “Ring-fencing the budget of the NHS and foreign aid whilst cutting defence budgets is where this government has got it completely wrong.”
Another added: “The problem isn’t that defence spending is being cut – this is unavoidable – but that the time wasn’t taken to examine what the government requires from the armed forces and how they might be organised to reflect this.”
Meanwhile, panellists were split on whether the Arab Spring would be good for the world economy: 40 per cent said it would have a positive effect; 27 per cent said it would have no effect; and 27 per cent said it would have a negative effect.
• City A.M. and PoliticsHome interviewed 434 members of the Voice of the City panel by email last week. It has been specially recruited to represent a cross section of London’s financial and business community.
Readers can apply to join at cityam.com/panel