Defence expenditure in Scotland

Kennedy, Gavin (1982) Defence expenditure in Scotland. Quarterly Economic Commentary, 7 (4). pp. 27-33. ISSN 0306-7866

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Scotland, like any other part of the United Kingdom, is defended by the resources provided by the UK defence budget of approximately £12 billion a year. If we were simply assessing the annual (and strictly notional) contribution from Scotland to the rest of the UK of its share of the UK defence budget it would be appropriate to take some ratio of Scotland to the UK and apply it to the defence budget. This has been the practice in the past and the most popular Scottish ratio appears to be that of its population as a percentage of the UK's, though others have been suggested (such as the ratio of Scottish GDP, or personal income). On a population basis the Scottish 'share' of UK defence expenditure would be in the order of £1 billion a year, or just under 10%. However, such attributed ratios have a strictly limited value in that their choice is arbitrary - one ratio compared to another could produce shares varying by many tens of millions of pounds - and their economic meaning is unclear. No such actual budgetary transfers within the regions of the UK takes place and notional transfers of this nature do not correspond in any way to the actual transfer of military resources. The actual disposition of military resources within Scotland (or any other part of the UK) is not determined by population or any other ratios but by what is thought necessary for the defence of the UK as a whole. Hence, an economist's interest in the UK defence expenditure in Scotland must be based on the strategic or convenience criteria of the Ministry of Defence - in other words it must account for actual and not notional expenditures. This brief paper will go on to explain the nature of defence in expenditure in Scotland.