(Spending figures are in millions of pounds.)
Figures in parentheses represent the percentage of total spending.
Spending figures for a given year do not add up to total spending because of exclusions, such as the cost of collection.
Total Spending Interest on Debt (14.1%) (47.9%) (38.0%) (11.4%) (37.1%) (45.7%) (10.1%) (31.0%) (56.0%) (9.4%) (29.0%) (54.4%) (12.6%) (27.2%) (51.4%) (20.7%) (30.9%) (34.5%) (29.7%) (39.4%) (10.8%) (34.5%) (36.3%) (19.9%) (47.8%) (14.0%) (28.1%) (58.6%) (21.0%) (14.2%) (76.5%) (17.2%) (4.0%) (76.1%) (15.0%) (6.8%)
Source: B. R. Mitchell, British Historical Statistics (Cambridge: Cambridge University Press, 1988), pp. 579, 586-94, 600-3.
1. Until after the Second World War, virtually all of the total national debt was accumulated to fight wars. So the total cost of national defense in any year was Military Spending plus Interest on Debt (the present cost of fighting earlier wars).
2. The national debt leaped up after each major war (1793-1815, 1914-1918, 1939-1945); however, the percentage increases in the debt and interest on the debt were significantly less after the Second World War, even allowing for inflation. This reflects how much more of that war was financed out of taxation and by American Lend-Lease aid.
3. The Seven Years War (1756-1763) involved a substantial increase in total spending, interest on the debt, and indebtedness. From this you can see why British governments were so intent on getting the American colonies to bear a greater share of the costs of their defense after 1763. There was another big jump in debt and spending after the American Revolutionary War.
4. The enormous increase in interest payments (the cost of the wars against France) in 1820-1850, accounting for over half the budget, helps explain the deflationary policies of the governments of those years as they tried to bring government spending under control. These policies helped make worse some of the economic difficulties of the period and so contributed to working-class unrest. The inability to reduce spending helps account for the eventual decision to adopt the income tax as a permanent instrument of finance in 1842.
5. In the 19th century (1820-1913), both the national debt and interest payments on the debt were fairly steadily reduced. This reflects the insistence on budgeting for a surplus, the lack of a major war, and the relative unimportance of civil spending.
6. Until 1900, the cost of national defense accounted for (roughly) at least two-thirds of total expenditure. Civil spending jumped significantly between 1850 and 1913 but still accounted for only 30% of the total before the First World War. Military spending as a percentage of the total was fairly steady between 1820 and 1880, but then started to go up with the increasing technological costs of modernizing the navy.
7. The inter-war period was crucial in changing the balance between civil and military spending in favor of the former. Note the savage cuts in military spending between 1920 and 1934, leading up to the period of appeasement. The whole budget was cut drastically between those years, reflecting the continued belief in a balanced budget. Nevertheless, this was the first time that the national debt went up in peacetime, although only very slightly. This reflects the cost of the Great Depression, and the impossibility of balancing the budget between 1930 and 1934.
8. The creation of the modern welfare state after the Second World War further transformed the balance between civil and military spending. Yet Britain was spending a larger share of its budget on the military than any other developed country except the U.S. It would have had to spend even more, except for the relative cheapness of nuclear weapons compared to conventional forces (especially the navy) and the fact that the American defense umbrella allowed all U.S. allies to maintain lower defense spending than would otherwise have been necessary.
9. After the Second World War, for the first time, the national debt went up substantially in peacetime, reflecting the influence of Keynesian economics and so the new willingness to accept budget deficits to maintain full employment.
10. The catastrophic effect of the inflation of the 1970s is evident from the totals for 1970 and 1980. Yet the relative importance of civil spending and interest on the debt changed little.