U.S. President Donald Trump has found an ingenious way of making a fairly reasonable argument sound like an international protection racket.
The United States reportedly wants Britain to spend considerably more on defence and is considering ways of persuading Andy Burnham’s government to do it. Among them, according to The Telegraph, is the extraordinary possibility that Washington could reconsider its support for British sovereignty over the Falkland Islands.
A senior American official says Britain will receive “special attention” as Washington examines whether NATO members have credible plans to reach the alliance’s new 5 per cent defence spending target.
Asked whether America’s Falklands policy could form part of that pressure, the official offered the wonderfully ominous:
“Nothing is being ruled out.”
It sounds outrageous.
But it also raises a much more interesting question than the usual patriotic argument about the Falklands.
What exactly is Britain defending 8,000 miles from home?
The answer used to be relatively simple: a few thousand British people, hundreds of thousands of sheep and the principle that Argentina cannot simply invade somewhere because it believes it belongs to Buenos Aires.
Today there is another answer.
Oil. Potentially billions of barrels of it.
Those islands suddenly look rather more valuable
The Falklands have always seemed an improbable piece of British territory.
A tiny population lives on a remote archipelago in the South Atlantic, considerably closer to Argentina than Britain. In 1982, 255 British servicemen died retaking the islands after the Argentine invasion.
The islanders themselves have subsequently made their position spectacularly clear. In the 2013 sovereignty referendum, 99.8 per cent voted to remain a British Overseas Territory.
That matters.
But so does what lies underneath the surrounding ocean.
The Sea Lion development north of the Falklands alone is now believed to contain approaching a billion barrels of recoverable oil potential.
And exploration across the wider North Falkland Basin suggests the ultimate prize could be considerably larger, with individual exploration licences containing prospective resources measured in billions of barrels.
Suddenly Britain’s strange collection of South Atlantic islands looks rather different.
A few thousand people?
Yes.
An enormous number of sheep?
Certainly.
But potentially billions of barrels of oil rather complicates the idea that the Falklands are merely an expensive historical relic left over from the Empire.
Argentina knows this too
Argentina’s claim to Las Malvinas long predates the discovery of oil, and it would be unfair to pretend that Buenos Aires suddenly became interested when somebody drilled a hole in the seabed.
But hydrocarbons unquestionably raise the stakes.
Control of the Falklands means considerably more than control of Stanley and some spectacularly windswept countryside.
It brings extensive maritime rights and access to potentially enormously valuable natural resources.
That makes any suggestion that Britain should casually reconsider sovereignty rather more difficult to swallow.
Britain would not merely be walking away from a distant group of islands.
It could eventually be walking away from one of the most significant undeveloped petroleum regions associated with a British territory.
Trump still has a point
Unfortunately for Burnham, however, the Americans have identified the obvious contradiction.
If these islands are strategically and economically important, Britain has to be capable of defending them.
And defence costs money.
Washington wants European NATO countries to assume primary responsibility for the conventional defence of Europe under what Trump officials are describing as “NATO 3.0”.
That is hardly an unreasonable demand.
Britain wants nuclear weapons, aircraft carriers, submarines, overseas bases, a permanent seat on the UN Security Council and the ability to project military power around the world.
It also wants to guarantee the security of territories thousands of miles from the British mainland.
Fine.
But eventually somebody has to pay for it.
Burnham’s Chancellor, John Healey, understands this better than most. When he resigned as defence secretary in June, he complained that Sir Keir Starmer had been “unable” and the Treasury “unwilling” to provide the resources necessary to defend Britain.
Now Healey is running the Treasury.
And suddenly the money appears rather harder to find.
His October Budget is reportedly unlikely even to guarantee that defence spending reaches 3 per cent of GDP by 2030.
Washington is entitled to ask how that adds up.
Perhaps Britain should send Washington a calculator
There is also an economic argument that could eventually strengthen Britain’s hand.
If substantial Falklands oil production materialises, the islands themselves could become considerably richer.
Oil revenues, royalties and taxation could transform the economics of maintaining the territory.
That does not mean Britain gets to pocket every dollar pumped from beneath the South Atlantic. The Falklands have their own government and fiscal arrangements.
But it does mean that describing the islands simply as a costly military obligation becomes increasingly outdated.
There is potentially an extremely valuable economic asset sitting alongside the strategic one.
And that makes Washington’s proposed leverage rather less clever.
If you’re trying to persuade Britain to spend more money protecting Western interests, threatening to undermine British control of a territory surrounded by potentially billions of barrels of oil is an unusual place to start.
Pay up or scale back
There is nevertheless an uncomfortable truth here for Burnham.
Britain cannot continue pretending that global influence comes free.
If we want the Falklands, we have to defend them.
If we want NATO leadership, we have to fund it.
If we want aircraft carriers, nuclear submarines and a global military presence, we cannot continually send the bill to Washington.
Trump’s methods are characteristically unsubtle, but his fundamental complaint about European defence spending is difficult to dismiss.
Burnham should therefore resist Washington’s threat while accepting Washington’s argument.
Britain should increase defence spending.
But the Falklands should not become the currency in which that argument is settled.
Forty-four years ago Britain sent a task force halfway around the world to defend a few thousand people and a lot of sheep.
Today those same people and sheep may be sitting beside billions of barrels of potential oil resources.
Perhaps hanging on to the place wasn’t such a bad investment after all.
