It is easy to fall into the trap of low expectations from budgets. Any one individual typically only ever hears the details from their own Chancellor and not those from other countries. This dulls the imagination of the range of ways in which taxes can be spent, a sort of mental paralysis that I fear parts of the UK is currently in the grip of.
For example, did you know that you get 2 days paternal leave in Greece but 12 months in Germany? Or that Finland recruits its teachers from the top 10% of graduates (and all must hold a Masters degree in Education)? Or that Sweden spends more on pre-school childcare than it does on Defence? Unthinkable in the UK, but already a reality in parts of Europe. Also in Sweden, nursery care is capped at 3% of a family’s salary. 3%. That’s enough to make some British parents sob hot tears given how many thousands of pounds many of them fork out on day care each year.
I wonder what we do here in the UK that our fellow Europeans look at in wonder. Don’t all rush to answer at once…
So, for my own benefit, I wanted to compile a breakdown of different countries’ budgets to get a feel for how much each spend on health, education, defence etc across Europe. Sadly, this proved too difficult an exercise, but I was able to pull together some useful lists showing spending as a percentage of GDP for certain countries (see list below).
These lists show that the UK is not the worst country in Europe in terms of value for money, but it is a far cry from being the envy of the Continent. Even our hallowed health spending on the NHS is middle of the road, as is our spending on education.
The spending on welfare was surprising, given we are close to the bottom. This certainly calls into question (moreso than already) the wisdom of the bedroom tax and the other harsh cuts to social security. Incidentally, if you aren’t marching against the bedroom tax in Glasgow or Edinburgh, you probably need to question what you would March against.
That said, the relatively high level of debt that we are exposed to within the UK does highlight George Osborne’s lack of options in terms of levers to pull to boost growth. We are, whichever way you want to look at it, in a bit of a pickle relative to other countries out there and I don’t envy Osborne the task ahead of him tomorrow.
The one area where we are top of the pops is Defence, the only area of spending that has no direct impact on quality of life at a civic level. I admit I was surprised that this level of spending is low in absolute terms relative to other government expenditure but it’s clear that this is where there is the greatest scope for savings, our budget’s area of least resistance if you like.
Reducing the £46bn cost of Defence to German levels would save £21.2bn/year, to Swedish levels £24.8bn/year and to Irish levels £35.4bn/year. That’s an expensive set of nuclear weapons that will never be fired and a pricey permanent seat on the UN Security Council. How many nursery place could those savings pay for? Cuts to this budget don’t even necessarily have to involve significant job losses given the £46bn works out at a massive £670k per person employed by the MoD.
Achieving Sweden’s success by investing more in our children than in weapons can be achieved in two ways, spending more on childcare or spending less on other areas, like Defence. Maybe it’s time we gave the latter a go.
Lists of countries ranked by various spending, employment and debt:
Education (%age of GDP)
Denmark – 7.8%
Iceland – 7.4%
Norway – 6.8%
Sweden – 6.6%
Belgium – 6.0%
Finland – 5.9%
France – 5.6%
UK – 5.5%
Austria – 5.4%
Netherlands – 5.3%
Portugal – 5.2%
Ireland – 4.9%
Germany – 4.5%
Italy – 4.3%
Spain – 4.3%
Defence (%age of GDP)
UK – 2.6%
France – 2.3%
Portugal – 2.1%
Italy – 1.7%
Norway – 1.5%
Finland – 1.5%
Germany – 1.4%
Denmark – 1.4%
Netherlands – 1.4%
Belgium – 1.2%
Sweden – 1.2%
Spain – 1.0%
Austria – 0.9%
Ireland – 0.6%
Iceland – 0.1%
Health (%age of GDP)
Netherlands – 12.0%
France – 11.9%
Germany – 11.7%
Denmark – 11.5%
Austria – 11.0%
Belgium – 10.8%
Portugal – 10.7%
Sweden – 10.0%
UK – 9.8%
Iceland – 9.8%
Norway – 9.7%
Spain – 9.6%
Italy – 9.4%
Ireland – 9.4%
Finland – 9.0%
Public Social Expenditure (incl Health) (%age of GDP)
France – 32.1%
Denmark – 30.5%
Belgium – 30.0%
Finland – 29.0%
Austria – 28.3%
Sweden – 28.2%
Italy – 28.1%
Spain – 26.3%
Germany – 26.3%
Portugal – 25.0%
Netherlands – 24.3%
UK – 23.9%
Ireland – 23.1%
Norway – 22.1%
Iceland – 16.4%
Pensions (%age of GDP)
Italy – 15.4%
France – 13.7%
Austria – 13.5%
Portugal – 12.3%
Germany – 11.3%
Belgium – 10.0%
Finland – 9.9%
Spain – 9.3%
Sweden – 8.2%
UK – 6.2%
Denmark – 6.1%
Norway – 5.4%
Ireland – 5.1%
Netherlands – 5.1%
Iceland – 1.7%
Debt
Italy – 126.3%
Portugal – 119.1%
Ireland – 117.7%
Belgium – 99.0%
Iceland – 94.1%
Spain – 90.7%
France – 90.0%
UK – 88.7%
Germany – 83.0%
Austria – 74.3%
Netherlands – 68.2%
Finland – 52.6%
Norway – 49.6%
Denmark – 47.1%
Sweden – 37.1%
Employment Rate
Iceland – 78.2%
Norway – 75.3%
Netherlands – 74.7%
Denmark – 73.4%
Sweden – 72.7%
Austria – 71.7%
Germany – 71.1%
UK – 69.5%
Finland – 68.1%
Portugal – 65.2%
France – 64.0%
Belgium – 62.0%
Ireland – 60.0%
Spain – 58.6%
Italy – 56.9%
#1 by Nick on March 19, 2013 - 9:17 pm
I’ve always thought that to justify spending on defence we needed an enemy to defend ourselves from.
#2 by Craig on March 20, 2013 - 12:49 am
“I admit I was surprised that this level of spending is low in absolute terms relative to other government expenditure but it’s clear that this is where there is the greatest scope for savings, our budget’s area of least resistance if you like.”
In other words, there are no votes in Defence. Nevermind what Defence actually requires to carry out everything that is expected of them.
Several points:
Defence spending faces a further 7.5% cut in real terms in this Parliament. This is on top of the real term cuts imposed on the Defence budget upto 2010. Other departments would have to experience much deeper cuts over the next 3 years to experience the cuts over the past 4 Parliaments.
MOD budget/staff in MOD. It appears you’ve calculated this by dividing the £46 billion MOD budget by the number of CIVILIAN staff in the MOD (~71,000). The MOD budget actually employs a further 186,100 regular service personnel! It is also largely responsible for the indirect employment of 300,000 people in the Defence industry.
Professional armed forces typically cost more than their conscripted counterparts – largely because of the higher quality. A number of countries in Europe have recently ended conscription, including Germany and Sweden, and have seen a corresponding continuing increase in costs.
Making this sort of comparison with other countries is dangerous – for one, it assumes that those countries are happy with their status quo, and secondly, it can overlook trends. For example, in Sweden there is increasing concern that Defence expenditure is too low (http://www.defensenews.com/article/20130201/DEFREG01/302010015/Sweden-8217-s-Military-Spending-Rise-). Other European countries are also reconsidering the resources they allocate to Defence in light of both budget cuts and other defence priorities (i.e the Pacific) for the Americans.
#3 by Iain Menzies on March 20, 2013 - 2:24 am
So rather than cut budgets that amount to almost a quarter of GDP you want to half the defence budget….well done you just sacked more than 100,000 people.