Vladimir Putin’s criminally obscene invasion of Ukraine changed everything. Britain and the West have been thrown back into a new cold war and clash of civilizations that will be protracted at best.
For the first time in more than 30 years, we face a truly existential threat. Our enemy is an enemy state armed with nuclear weapons, a large conventional army and led by an empire-building psychopath: the threat to European powers is orders of magnitude greater than the very real risk posed by post-9/11 Islamic State .
This new conflict will almost certainly be long, complex and extremely expensive. It will not be like fighting the Taliban or Saddam Hussein or lone fighters. It will require us to relearn strategies, tactics, and virtues that are at odds with the hyper-emotional performative stupidity and instant gratification of the Twitter era. Our elites need to reprogram themselves psychologically, economically and militarily, read some history, become more serious and stern, and engage in a long struggle.
I am not sure if they are ready for the challenges ahead. While the West has successfully unleashed an economic blitzkrieg on Russia that has been hammered out far more extensively than expected, Putin has so far failed to retaliate with counter-sanctions and export restrictions. He may still choose to cut off energy, fertilizer, or precious metal supplies. Such a move would be suicidal for his regime but would wreak havoc in the West, forcing the imposition of rationing, three-day weeks and speed limits as we scramble to find new sources of oil and gas.
But even without an actual embargo, Europe and Britain are already facing an energy shock similar to that caused by the 1973 Arab oil crisis, the 1979 Iranian revolution, or the 1990 First Gulf War. Household energy bills could reach £3,000 a year when the next price cap is set and petrol prices are skyrocketing: a recession is no longer out of the question. So soon after the damage and higher inflationary pressures caused by Covid, tens of millions of people face gradual impoverishment. The political consequences could be severe.
But all of this pales in comparison to the emerging realization that we are on the verge of returning to the nuclear fear that gripped a generation of children between the 1960s and 1980s. The likelihood of nuclear Armageddon — either from a catastrophic miscalculation by an unstable, desperate Putin, or indirectly if a collapse of the Russian regime triggers an arms sell-off — while still small, is at its highest since the Reagan-Gorbachev treaty on intermediate-range nuclear weapons was signed in 1987.
Russia is just the first of the authoritarian states to openly declare its hand: there will be more wars, invasions and egregious violations of sovereignty. A nuclear Iran would certainly launch a disastrous attack on Israel or the Gulf; China may try to invade Taiwan over time; North Korea is ruled by a madman; Nuclear Pakistan might one day break away and so on.
A major consequence of this abrupt shift in world order is that the post-Cold War peace dividend will no longer pay off. We need to spend more on defense. We must fuel our economic growth with supply-side reforms, not only to improve living standards but also to offset the costs of deglobalization and generate the resources needed to fight authoritarian powers. We will need sensible energy policies: Like in the 1970s, this time we were caught by our idiotic decision, driven by green zealots, to shut down domestic oil and gas production without building the nuclear capacity needed to complement renewable energy.
The biggest immediate change must be in defense spending. The built-in verification itself must be verified immediately. The NATO target of 2 percent of GDP is fine in peacetime, but ridiculously low when a new Iron Curtain falls over Europe and we need to deter, contain and terrify rogue regimes worldwide.
The peace dividend after the collapse of the USSR was at least 2 percent of GDP. Britain’s defense spending was around 7 per cent of a much smaller GDP in the 1950s and stayed at around 4 to 5 per cent between the late 1960s and late 1980s. Boris Johnson needs to bite the bullet: we urgently need to get spending back to 3 percent of GDP, possibly 3.5 percent, if we are to be Europe’s leading military power. I do not say this with relish: I am not a militarist. But there are no other responsible options, and increased spending must also be accompanied by radical procurement reform to ensure billions are not wasted.
The UK peace dividend has been spent on more than one occasion, mainly for pensions and the NHS. With the tax burden already at an all-time high, the economy cannot afford a VAT hike from 20 to 25 per cent or an additional £40bn increase in Social Security. This would condemn us to a zero-growth economy that would be morally and geopolitically unjustifiable.
The post-Blair era of social-democratic generosity must end: the state must refocus on its core function of defending life, liberty and property. We need less redistribution and more resilience. This implies large spending cuts. The welfare plan must be abandoned, triple-barred pensions scrapped, the NHS reformed, and numerous wasteful subsidies, pseudo-leveling policies and other schemes and handouts ended.
We’ve prevented the free market from providing cheap energy, so the government has a huge bill to foot. Britain needs at least five more Hinkley Point C nuclear power stations costing £110 billion. The best way to pay for this is to scrap HS2, write off the money already spent, and sell all of his land and fortune. In times of war, large-scale, uneconomical projects are outdated excess.
Yes, Russia is shockingly weak, a decaying nation with a population much less than half that of the US and a GDP well below that of New York State. But it has nuclear weapons and must be deterred and eventually defeated. We must also send a signal to China, a country immensely wealthier and more advanced than the Soviet Union ever was, that the West is serious again. This is a new Cold War and we urgently need to contain the authoritarian powers at war with liberal democracy.