Britain’s armed forces are too weak to prevent war or protect the nation in the event of conflict, said Labour peer Lord Alan West of Spithead, who served as first sea lord from 2002 to 2006.
The former top commander said the services were “too small” and stressed the need to increase defence spending.
Mr West delivered his verdict as peers debated at Westminster the effects of the war in Ukraine after the Russian invasion, which has increased international tension.
“There’s considerable truth in the view that wars are won not on the battlefield but by building up military capability beforehand," Mr West told Parliament.
"It’s noticed by competitors, particularly dictators, and therefore it prevents war but it takes time.
“Many of us have warned of chronic underfunding and we have been told time and again we were wrong.
“The reality is our armed forces are too weak to prevent war … and if there is war, and I am afraid one day there probably will be, they lack the equipment and manpower to keep us safe.
“Our army, navy and air force are too small. They lack the ability to withstand the inevitable attrition and are insufficiently equipped with state-of-the-art, fully maintained and sufficient core stocks for the inevitably high war-usage rates.
“Numbers do matter, whether it’s ships, aircraft or people. The reduction of the army to 72,500 is a step too far," the former security minister said.
“There seems to be a belief in government that future wars will be fought solely in cyber space using advanced technologies … and there’s no need for traditional military equipment and numbers.
"That is dangerously simplistic nonsense. Clearly those new things are very important to the way we fight war, but you need more than that.
“The advantages of high-tech in helping the Ukrainians have been highlighted in this recent conflict, but the Ukrainians still need boots on the ground.
“The government have a choice over whether we spend what is required to ensure the safety of our nation in defence terms, to stop world war, look after our dependencies and our people, or not.
"At present, I believe they are getting the choice wrong. With war raging in Europe and possibly extending to a world war, there is a need for an immediate uplift in defence spending.”
Former head of the British Army, Lord Richard Dannatt, also urged more defence spending.
“We need more armour, more artillery and we need more manpower," Mr Dannatt said. "To have an army that is going down to the smallest size in the last 200 years is completely unacceptable."
Former head of the armed forces Lord Jock Stirrup said the ammunition stocks of the UK and other Nato members were inadequate and stressed the need to boost them.
“The war in Ukraine has reminded those of those who may have forgotten of the appalling rate at which munitions are expended in high-intensity conflict," said Mr Stirrup, an independent crossbencher.
“For too many years we and other Nato nations have taken too much risk with our munitions stocks.
“They were already inadequate and they have rightly been depleted further because of the need to supply Ukraine.
“We now need a concerted effort to bring ammunition stocks across all three services not just back to where they were, but to where they should have been in the first place, and we must press our Nato allies to do the same.”
Foreign minister Lord Zac Goldsmith of Richmond Park responded: “We are increasing defence spending by over £24 billion ($30bn) over the next four years.
"That is the biggest investment in the UK armed forces since the end of the Cold War.”
He also highlighted the extensive military support being provided to Ukraine.
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Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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