Fighting Britain's warring gangs is a better use of the £14bn Afghan budget, says peer

Lord Oakeshott, the Lib Dem peer, warned over the weekend that the UK has already wasted £14bn on the war in Afghanistan and cannot afford to continue spending more on the military operation at a time of such acute financial crisis.

The former Treasury spokesman said: "We have wasted £14bn on going to war in Afghanistan, and we are losing hundreds of lives in a futile war propping up a failed state – already far more than the £8bn spent on going to war in Iraq."

He added that the UK is now spending about £4bn a year on keeping troops in Afghanistan; "That's £500 for every taxpayer at a time when the public and household purses are stretched to breaking point."

Lord Oakeshott was given the latest figures on the cost of war from a written parliamentary question last month, which showed that the total spend from 2001 to 2010 has been £10bn, and that in this past year another £4bn had been spent.

He said last week: "Britain would be a far safer and stronger country if we spent this money fighting gang warfare and illiteracy. The outlook is bleak when a fifth of our young people cannot read, write or add up properly ... virtually unemployable in a 21st-century developed society."

Lord Oakeshott added that the Government must continue to put pressure on the banks to lend. "Finance is the lifeline for small business, and therefore for growth, and all alternative sources of funds must be explored." His comments follow his call last month for targeted cuts in VAT for housing refurbishments and home repairs in a bid to boost jobs in the building sector and to reduce tax evasion.