BLOOMBERG UK ‘IN THE CITY’ PODCAST
So, Tom, you're a security minister for two years until the last election. Be honest, how much of this did you see coming?
Well, I think we all knew that Trump was a disruptor, and I don't think that's much of a surprise. The level of disruption is significant, and it's certainly true that what we're seeing now is similar to a 9/11 moment. It's one of those moments where you have to rethink the fundamentals. You have to think really hard about what it is that you're prepared to do on your own, what you need to do with allies, and how you need to build up new relationships. So I think this is a very fundamental moment of rethinking, and in many ways it's one that's been needed for a little while.
So, your former security minister, we've got the current Prime Minister talking about an uplift to 2.5 percent by 2027, and then he is already saying, which I think did surprise a lot of people, he'd go to 3 percent by in the next parliament. But is it enough when you've got America talking about removing itself from the scene pretty much completely.
Well, I mean, what we're discovering at the moment is how much the American defence contribution has meant to the UK budget over the last thirty forty fifty years, and the reality is it looks like it's between one and four percentage points of GNI. Because if you want to replace the strategic lift, the satellite communications, the ISR and all the other different elements that have made up part of our security architecture, you're talking not a few hundred million pounds, but you're talking tens of billions. Now, that doesn't mean you have to replace them all in a day, of course you don't. And it doesn't mean that the United States has left NATO or is a totally unreliable partner or anything like that. But it just means that you need to think about what it is that you're going to need and determine whether it is likely you'll get it. There's some things I think we will definitely maintain that connection with and I don't think there's any real question about it, satellite communications and intelligence being too. But there are other areas like strategic lift, which might involve areas of operations in Ukraine or something like that, where you've got to look at what happened in 2011 when David Cameron and Nicolas Sarkozy went to conduct operations over Libya. And at the time I was a military officer advising the Chief of the Defence Staff, and it became rapidly, very, very obvious what we needed in America for. And it wasn't just defence stocks. We almost ran out of missiles of various different points and bombs at different points, but also the communications and the support.
So to be clear, we're looking at 2.5 or 3 percent uplift. But do you think when this is all said and done, the UK will have had to spend more than three percent of GDP on defence.
Yes, I don't think there's any real debate actually in any serious military circles. The reality is what you're looking at is you're looking at a fundamental change. Now does that change take you to three, three and a half? I don't know. It depends on what we're going to see. But the reality is it depends on your defence assumptions. And one of the things that the New Strategic Defence Review is doing under Lord Robertson, under General Barons and under Fiona Hill, who you'll remember was a DNSA in the United States, is they're looking at these defence assumptions and actually having Fiona Hill on that team is a very, very good appointment by John Healey because she'll have a very good understanding not just to the Trump White House, but of the underlying pressures and currents in the United States. Because only anybody believes that we're going back to the United States of 1980 or 1990. We're going back to a very different United States at the end of this Trump term in four years’ time.
Just reflecting on that Oval Office at the time, it appeared to be a triumph by the Prime Minister as a well-choreographed, well-handled event, but it obviously did go south very quickly with the Zelenskyy, Donald Trump, and JD Vance televised exchange. How would you have handled that differently?
I thought the Prime Minister did extremely well. I'm not going to criticize him. I think the Prime Minister should be given credit for it. I think that the challenge that he's got is the fundamental reality that the United States has changed as a partner. And you can argue that it's a gradual change, of which Trump is the latest iteration. That's certainly true that the Obama administration, the previous Bush administrations and so on warned about European free riding, or you can believe that it's a very fundamental change. I was speaking to a senior foreign minister from one of our allies yesterday, who believed that it was a much more significant switch and this wasn't some sort of return to Wilsonian doctrine or that form of Americanism, but actually a very fundamental transactionist and isolationist form. So you can put your own interpretation on, but it is a very big change, and I think that's something that the UK system hasn't yet fully taken on both.
I agree with your characterization of the event last week. It was well executed British diplomacy, but it does appear that part of Starmer's plan to put British and along with French peacekeepers into Ukraine does rely on an American backstop that doesn't look like it necessarily will come to pass. So I suppose the problem is going forward. How much does Starmer need Trump back in the room?
Well, I think we all need the United States back in the room. I don't think there's any great debate that the Western alliance that has kept not just Europe, but actually the many, many large parts of the world, including parts of East Asia, free, prosperous and just for the best part of seventy eighty years, is possible without the United States. And by the way, I think it makes the United States free, prosperous and engaged as well. I mean, I think if you look at US economic prosperity from the 1950s to the 1980s, it was almost entirely underwritten by ideas like the Marshall Plan that saw the creation of mass markets that enabled US conglomerates to expand. And you can certainly make the argument that the US domination of the rules-based system is one of the aspects that has made its tech companies so extraordinarily powerful. The underwriting of the dollar. It's the underwriting of the common architecture. So I think this is very, very much in US interests, and what we've got to do as Western partners is demonstrate that. And I think what we've got a problem with over the last few years is we've looked like free riders because we have been free riders on certain aspects of it. We've actually been really important twin players, as it were, on other aspects, and we haven't made those aspects clear. And I think this is a transactional time, not just in the United States, but also in the United Kingdom, and so actually making that clear is really important. And that's where I think we have a role in communicating, not just to ourselves, to Russia, to China, but actually to the United States.
Let's just look at Ukraine before we look a little bit more widely at the relationship with the United States. But on Ukraine, you're a former Security Minister. How long can Ukraine keep going without American military aid?
It's very hard to say from this perspective, but I think Ukraine has been written off many times in the past. It was written off in 2014 when admittedly a very rapid and effective Russian military operation took Crimea. It was again written off, as you'll remember, in February 2022. I was there in January, and I remember speaking to the then National Security Advisor of Ukraine in a rather koi but when it came to being one to one, it was extremely frank. He knew exactly what he was facing and he was prepared. And then they had caged weapons and ammunition around the country and they were ready, I mean as ready as they could be, right, and there was that moment when President Zelenskyy was offered a ride and he said he didn't need a riding in ammunition. So you know, Ukraine has been putting off time and time again. And currently Ukraine is producing I think it's between fifteen one hundred thousand drones a month with which they're conducting operations against Russia. And whatever you think about Russia, Russia has lost somewhere between seven and eight hundred thousand men killed and injured in the last three years. And for that level of death and destruction and misery, they've gone from holding nineteen-point six percent of Ukrainian territory to nineteen point two. So the idea that this is somehow, some sort of great Russian victory is complete rubbish. Now, only a few weeks ago, maybe just over a month ago, the Ukrainians conducted one of the first operations which was entirely drone one hundred or so units. I don't mean individual drones, but units of drones conducted operations against Russian targets, effectively destroying an entire Russian unit and the people who were commanding it or controlling it were three hundred miles away and there were four of them in a room. That's it. That's a remarkable change. So the idea that Ukraine is somehow going to collapse tomorrow, I don't buy that. Said, of course, it needs support and ammunition, and it needs help that the West can give.
Does this strategic landscape that we're looking at right now, does it impact the UK's national security?
Absolutely yes, it completely does, and it impacts the UK's national security in some rather obvious ways in the sense that the reality is what we're seeing today is we're seeing a consumption of defence stocks at speeds which leave all of us slightly more vulnerable. You know, we are, we're running down our own defence stocks. So if we were to need weapons and ammunition, we have less in the cupboard now than we did three years ago, and so that's a huge element. Secondly, there's a massive distraction factor. You don't need to mean to tell you that what Iran has been doing in the Middle East is unbelievably pernicious. What Russia has been doing in West Africa is extremely violent, and a lot of its connected to human trafficking, slavery. Really, we're seeing other areas of the world raising different challenges and they could easily flare up in different ways. We're also seeing Russia attempting to spark revolution out of places like the Balkans. So you know, this is something that we know is already happening in other areas. So yes, it's having a direct impact on us. And you know, having the United States distracted when it is an absolutely essential security partner is problematic, of course it is.
And I think the thing you haven't mentioned, but I'm sure it's not an oversight is you've got in President Trump. He's bringing Putin to the table on quite a few issues.
We have had allegations in the past of relation to conversations between Musk and Putin and Russian officials. How much do you feel, as a former security minister who obviously looked at this stuff day in day out, how much do you feel that the UK now has to be wary of the information it shares with the US because of relations that they are now conducting with Russia.
I think it's very easy to get parallel these things. I think we've always had a very strong intelligence sharing relationship. It's important to remember that the Five Eyes partnership between the Australian Museum in Canada, the UK and the US is not actually just an intelligent sharing relationship, it is an intelligence collecting relationship. The difference is you've got to bring something to the party otherwise that you don't get in the club, and the US brings a huge amount to the party. I think the UK is a massive part of that as well, and the depth of the relationship is very, it's closer than I think many people quite understand. I mean, the personal contacts, let alone the professional contacts between our intelligence professionals is very, very high. So I don't share a huge amount of concern. I think that there are real challenges going forward for all of us on how to deal with Putin. I think the US has an approach, some of it known. Criticize if you want, but it is an approach that is trying to bring Putin to the table. Now, I think it depends whether you believe that this is a territorial deal or a sovereignty question. Some people believe it's a question of land and it's a trade, and other people believe it's an existential question over the existence of a sovereign Ukraine. Now I know which it is.
So you feel, no matter how close Trump gets to Putin. To your point, you feel that it's a negotiation and it's an attempt to solve a conflict that has been enormously denuding for the entire world. But you feel that even however close he gets, there are no implications for UK security sharing.
Look, I think that the United States has had a very, very long record of dealing with very difficult players like Putin. I mean, this is not, you know, this is not our first rodeo and the reality is that some of those relationships have raised eyebrows in various different partnerships. And you know, sometimes things that we've done have done that. And what's important to do is to make sure what we're doing is we're maintaining the relationships that matter. And for us, it is an absolutely fundamental relationship that we must maintain and we do it because it keeps us free, it keeps us safe, and it keeps us prosperous, and it supports and helps our allies. You know, the security of the Republic of Ireland, the security of Germany, and the security of France. The security of many of our partners around the world is connected to the UK's relationship to the United States and security and intelligence.
So just to end, let's try and be positive. Do you see strategic advantage on the horizon for the United Kingdom? And just thinking economically, Rachel Reeves was speaking yesterday and she talked about the increase in defence spending going into parts of the United Kingdom and in that sense, and we hear at Bloomberg have written about this quite a bit in the last few weeks. In that sense, it is a growth agenda.
Look, I mean one of the phrases using government when you were there was levelling up. I mean defence is levelling up. It's levelling up in two senses. One, it's manufacturing. It's old fashion manufacturing in some cases, but actually very modern manufacturing in others, and much of which have in parts of the country like the northeast, Northwest Wales, Belfast and Northern Ireland where investment is really important. But secondly, it's levelling up in the sense it's training. You know, we take young people into the armed forces and the intelligence services and we train them, and it's a huge investment in young people, which whether they stay two, three, four years or whether they stay twenty years, they end up contributing in different ways to the economy. Now that is enormously important. So I'm really positive about Pen's investment. The second thing I'm positive about actually, I think one of the things that this change means is that the UK has a very, very important role not just to ourselves but to countries like France and Germany and Sweden and even countries like Japan, Australia and India that we need to be really emphasizing.
Now this is where I think there is a huge opportunity for a UK strategic reset globally, and we're already beginning to see it by the way in which Macron and Schultz and I suspect Mertz and due course are beginning to come to London. I think the Prime Minister's meeting in Lancaster House on Sunday was frankly a triumph. I think he did extremely well. He brought NATO together. Forgive me, I'm not in the usual position of praising Labour but I think the last few days he has done well. And what this means is that the UK is being remembered again as a strategic partner on the international stage, which is almost impossible to match. Now. Nobody wants to ignore the United States or cut it out or do anything like that, but the relationship is difficult. Kir Starmer has demonstrated he can do it. The United Kingdom has relationships at every level, personal relationships. I have friends I served with in combat in Iraq and Afghanistan and now sitting in the House of Representatives and the Senate. You know, I'm not unusual in that I've got many friends who, you know, served in combat with young lieutenants in the US Army, and the two of them are now three-star generals, one in the British one of the American Army. You know, we have a very, very close relationship. So the United Kingdom has a real opportunity, building on our defence networks, on our intelligence networks, on our diplomatic networks, to be that strategic partner for many countries around the world. Now, what we need to do is invest in it. But I do think it's an investment, it's not a cost. So actually taking British defence investment from what it is now to two and a half percent up to three or even four percent can easily be seen as levelling up and strategic outreach, and I think both of those are going to prove increasingly important to UK companies in the future.
During this conversation, I think you've been in your spare room, and I think behind your head is a map of Iraq.
In my defence, it's actually a map of Afghanistan. You can see behind me. I'm going to tip very slightly.
You're both it was hard to make out.
That's a historic map of Afghanistan. Below is the silk map of Afghanistan with which I was issued and which must have got lost in combat, because otherwise, obviously I would have returned it to the stores.
Okay, all right, thanks for listening to this week's in the City podcast from Bloomberg. This episode was hosted by Me Like Stratton, produced by Soasadi and Moses and Am Sound designed by Blake Maples and special thanks to Tom Tugendhat. Please subscribe, rate, and review wherever you listen to podcasts.
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