LONDON — A vote in favor of Britain exiting the European Union could trigger spending cuts for the military and a new strategic defense and security review, according to the deputy director-general of the Royal United Services Institute think tank.
Current plans for defense spending over the next decade might have to be revisited, especially if projected gross domestic product growth fails to materialize in the aftermath of an exit vote, said RUSI think tanker Malcolm Chalmers in a report set to be issued in London June 3.
“While some short-term cut in planned defence spending is probable, the long-term impact would depend on whether the initial shock as a result of a ‘leave’ vote was followed by a longer-term deterioration in economic performance,” he said .
Britain goes to the polls June 23 in a referendum which will decide whether the country remains a member of the 28 nation European Union or exits, a process known here as Brexit.
While a vote for staying still commands a lead, pollsters have been reporting a rapid narrowing of the gap by Brexit supporters in the last couple of weeks.
Immigration and the economy are the main referendum battlegrounds, but the possible impact on security and defense has also grabbed the headlines.
Remaining in the EU is widely supported by the defense and security businesses here, and some companies, notably Airbus, have sent letters to employees outlining the reasons for continued membership.
A survey published recently by the aerospace, defense and security trade body ADS showed overwhelming support for continuing Britain’s membership of the EU.
Some 70 percent of defense companies and 74 percent of aerospace firms surveyed by ADS said their preference was to remain part of the EU.
Remain supporters, including the Chancellor George Osborne and Bank of England Governor Mark Carney, have argued that leaving the EU would cause serious damage to Britain’s future economic prospects.
Chalmers said an exit would not just be confined to Britain but have an impact across the region.
Britain is currently “the EU’s strongest military and its second largest economy so an exit could also have far-reaching implications for the European order more generally,” he said.
The RUSI analyst said an exit from the EU could result in “a strategic shift as profound as that triggered by the country in the late 1960s and early 1970s … when the UK withdrew the bulk of its military forces from Southeast Asia and the Persian Gulf.”
The British are only now starting to reverse that strategic decision with a strengthened naval presence in Bahrain and considerations of setting up a permanent land training base and docking and repair facilities for Royal Navy warships in Oman.
Brexit campaigners argue that far from damaging defense capabilities, an exit from the EU would allow the UK to return to its role as a major global power.
Chalmers said there could be countervailing pressures on the UK to redouble its commitment to European defense, in part to address concerns that exiting the EU would risk undermining confidence in NATO.
The Conservative government announced its latest strategic defense and security review last November but Chalmers said there would be a strong case to revisit key strategic and policy choices in the wake of an exit vote.
Provided a stable government emerges following the referendum, there is a strong case to begin a “new, post-Brexit SDSR process by the end of 2016 with completion by the spring or summer of 2017,” he said.
As things stand, a new SDSR is not scheduled until after the next election, which is currently set for May 2020.
Chalmers said the size of the shock to the defense budget should not be overstated and it was most likely that spending would be reduced in proportion to the reduction in projected gross domestic product.
Estimates by the Treasury and others put that at anywhere between 1 percent and 8 percent during the first three years.
The British are currently slated to spend £178 billion, or $257 billion, on equipment and support over the next decade, with the total defense budget rising from £35 billion ($51 billion) this year to £39 billion ($56 billion) in 2020/21. Some of the capability improvements will be funded out of big efficiency savings planned by the MoD.
Howard Wheeldon of consultants Wheeldon Strategic says that while a Brexit would present longer-term implications for defense, the Government had no room to maneuver on armed forces and security spending.
“Stay or leave, there is no room left for cutting back on UK defense, and to suggest that another SDSR might be required is to fail to understand that in a world of increasing uncertainty there can be no holiday from history. UK defense and security strategy must always be based on necessity and whether we like it or not be above the pure economics of affordability,” he said.
“There is little room for flexibility and the whole [SDSR] concept relies on the pretext of saving £11.5 billion between 2016 and 2020 to pay for the enhanced capabilities planned. The cupboard is bare,” said Wheeldon.
Whatever the pressures for spending reductions, some key defense commitments would be likely to remain untouched.
Chalmers said these include plans for Successor-class nuclear missile submarines, increased investments in counter-terrorism and cyber-security, and the entry into service of two new aircraft carriers now being built by a BAE System-led industry alliance.
What happens to the remaining programs and capabilities would depend on the balance between global, European and domestic commitments of a Britain living outside the EU, he said.
Chalmers said a Brexit vote would not necessarily increase the likelihood that Scotland would then hold another referendum to leave the UK, as some have threatened.
“But the possibility of Scottish independence, in some form, would remain an ongoing risk to the stability of the UK’s defense arrangements,” he said.
Scotland voted in favor of remaining in the UK in a 2014 referendum.
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