UK defence spending to increase

It’s all happening now. Prime Minister David Cameron will ask Parliament for permission to extend UK airstrikes against the Islamic State to Syria, according to the New York Times. This comes, by the way, as news hits of a Russian jet being shot down near Syria by Turkey.

That seems like unfortunate timing. The last thing that part of the world needs is more planes from more countries dropping more bombs on more people who are aligned to more countries dropping more bombs.

Cameron’s defence review

The present UK airstrikes are limited to Iraq based on a 2013 parliamentary vote. That could change this week. Cameron also announced the results of a defence review: more military spending and a reversal of a downward trend. UK defence spending declined by 22% from 2010 (£44.3bn) to 2015 (£34.4bn).

But as predicted in the 30 October cover story of MoneyWeek, “the new global arms race” is on. That story named six stocks investors should buy. Two of them were London-listed stocks. Those two stocks are up 12.5% and 8.5% since 30 October, respectively. Nice work MoneyWeek.

The defence review suggests two new 5,000-man “strike brigades”. They’d be capable of rapid deployment anywhere in the world by 2025. Also on the table is extending the service life of Britain’s Typhoon fighter by ten years to 2040. The Trident nuclear deterrent features prominently as well.

Not everyone will feel good about war-time profiteering, of course. But that’s not the way I see it. Things happen in the world. You first need to understand them. Then you need to decide what to do with your money. That’s being realistic. The last part is between you and your conscience, which I take it is what ‘ethical investing’ is about.

Dan Denning's Signature

Category: Geopolitics

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