Category Archives: Government

Britain, Defence, Europe, Foreign Affairs, Government, Military, National Security, NATO, Politics, Society, United States

Being prepared for war is essential, but war is not cheap…

ROYAL UNITED SERVICES INSTITUTE STUDY

A study released by the Royal United Services Institute (RUSI) shows that Britain’s involvement in Iraq and Afghanistan has cost the UK Treasury more than £29 billion. In the report, the think tank argues that the wars were “strategic blunders, spreading terrorism, drumming up resistance and increasing the opium trade”.

The conclusions, though, are controversial. For instance, the authors of the study assert that various terrorist groups would not be infiltrating Syria or threatening Britain had Saddam Hussein stayed in power. Yet, Hussein was a bloodthirsty tyrant and despot, who clearly acted as a state sponsor of terror. Tens of thousands of lives were lost, thousands more were gassed in ethnic style cleansing in northern Iraq, and Saddam Hussein would certainly have had vast stockpiles of nerve and chemical agents at his disposal left over from his 8-years war with Iran. Many of these stockpiles still remain unaccounted for. Had Hussein not been toppled he doubtless would have continued to persecute his own population. The tyrant’s bloody wars against the Kurds in the north and Arab populations of the south should never be forgotten.

Putting aside the arguments about Britain’s role in the ‘War on Terror’, one uncontroversial fact emerges from the report which is indisputable: war is not cheap. The Strategic Defence and Security Review (SDSR) has witnessed massive cuts to our Armed Forces budget. Army numbers have been drastically cut back, aircraft have been withdrawn, tank battalions diminished, and even our last aircraft carrier decommissioned. Further cuts are imminent. Many of these cuts are being justified by the theory that we would never have to engage in the variety of long-term overseas military adventures that typified our activities and engagements during the Cold War era.

Since 2001, however, we have actually been involved in two such operations at a significant cost. And within the last few days, President Barack Obama announced that he would like America to act more as part of an international coalition rather than taking unilateral action. This implies, at least, a continued British role in Western security.

The UK has to be prepared for all eventualities, and adequate contingencies should be in place. As relations with Russia continue to worsen, for example, it might prove necessary for the UK to play a part in the wider campaign of checking Vladimir Putin’s belligerence. Only last month, Britain sent four Typhoon fighter jets to the Baltics as part of a NATO deployment, a sign that the West is unwilling to allow Europe to disintegrate at the hands of the Russian president. Nobody wants a conflict, but the potential for a tough offence remains the best defence.

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Britain, Business, Economic, Finance, Government, Legal, Politics, Society, Taxation

Amazon’s tax advantage is economically unfair. Time to put a halt to it…

 

TAX LOOPHOLES

The age of the internet has brought colossal benefits to many large, multinational companies. No more so than for Amazon, a distribution giant. The company has earned very lucrative revenue streams, but has managed to deftly reduce its corporation tax bill through skilful use of tax loopholes. Last year, Amazon paid just £4.2 million in UK corporation tax, despite generating UK sales of £4.3 billion. The firm has been heavily criticised because it has now emerged that it avoided paying billions of pounds in tax last year by funnelling revenue of £11 billion through an overseas company based in Luxembourg. Amazon is also reported to have received a financial inducement and rebate amounting to £4m from the authorities in Luxembourg as part of the controversial arrangements.

This is all the more startling considering Amazon has received more than £10m in financial assistance from the Scottish Government, with the company opening a logistical distribution hub in Dunfermline, alongside its customer call centre in Edinburgh.

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Striking the right balance between competitive rates of Corporation Tax to attract foreign direct investment such as this while ensuring companies pay their rightful share is a difficult and complex area for politicians of all parties. Whilst Amazon’s avoidance causes public anger, governments have to take into account the investment the company has made in a country and the employment which that investment has created. Amazon may well argue that it would not have invested if it had been discouraged from exploiting this position.

A low rate of Corporation Tax which the UK offers in comparison to other countries is generally attractive for foreign firms wishing to make direct investment. But such schemes should also encourage companies like Amazon to pay and reduce the incentive for elaborate avoidance schemes of this sort. The loopholes provide too much of an economic and financial advantage for many large multinational firms. These require to be reined in through tighter political scrutiny and more exacting and better enacting of legislation.

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Britain, Defence, Government, Military, National Security, Politics, Society

New round of British Defence Cuts…

DEFENCE

Intro: Our severely reduced military capability amounts to a mere standing defence force, and one that is barely equipped enough at present to deal with the most basic of future threats

The announcement from Whitehall that there is to be further cuts to Britain’s already shrinking Army, albeit on grounds of economy rather than strategic priorities, is deeply alarming.

The new rounds of cuts are aimed, primarily, at Britain’s elite rapid reaction force – the most unwarranted target for making economies and savings through cost-cutting. A prime target earmarked is 16 Air Assault Brigade, a core component of which is Britain’s elite Parachute Regiment. It is to be stripped of half its regular infantry battalions, as well as reductions in some of its helicopters, artillery and armoured vehicles. The Royal Engineers, who support our elite forces through maintenance of equipment and servicing, are also to suffer wide ranging cuts to its budget. 16 Air Assault Brigade is to be reduced from the current level of 8,000 troops to 5,000 by the end of this year. Such a scaling-down is difficult to discern given Britain’s post-Afghanistan strategy. This was meant to be focused on our military capability deemed agile enough to respond and execute contingency operations as they arise in the future. A diminishing capability raises fresh concerns over the Government’s overall defence policy.

Alarmingly, these latest cost reductions are to be implemented alongside the already massive cuts inflicted on the Armed Forces. The last strategic defence review in 2010 proposed the reduction of the Army’s strength from 102,000 regular soldiers to just 82,000 by the end of the decade. Parallel reductions of 8,000 personnel in the RAF and 5,500 in the Navy were also part of the defence reconfiguration. Not since before the Napoleonic Wars has Britain had such a low level of manning to call upon in the event of defending sovereign interests.

Some £10 billion has already been cut from the defence budget. Whilst understanding the need for austerity and for efficiency gains to be made where they can, of which the Ministry of Defence cannot expect to be excluded given its high wastage rate on incompetent procurement programmes, defence of the realm is a paramount obligation of every government. If that duty is neglected, a government runs the risk of all of its other priorities and government policies becoming compromised in the process. It is crucial, then, that Britain retains an effectively trained army with a full complement of experienced and professional troops. For many, though, our severely reduced military capability amounts to a mere defence force, and one that is barely equipped enough to deal with the most basic of future threats. Yet, the world is a far more dangerous place than it has ever been, and Britain should be punching above its weight: diminution of military resources reduces the UK’s global influence – military cuts which go against the Government’s aspiration of retaining a place at the top table around the world. To have a positive influence, it is crucial that Britain’s Armed Forces are sufficiently maintained if that ambition is to be met.

There is no doubt that Britain’s military Armed Forces have been pared to the bone. It has reached the stage where any further cuts may well imperil national security.

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