Defence spending: interim thoughts
Amid reports that defence spending may not rise until the next decade, I set out some observations on the problem and why a solution, however difficult, is urgent
At the end of last week, The Times reported that the Prime Minister had concluded that it would be unaffordable to increase defence spending to 2.5 per cent of gross domestic product, a pledge the Labour Party had included in its election manifesto, until after 2030. You do not need to be the most insightful observer to notice that this would mean a point in time after the next general election, which must be held at the latest in 2029, and is therefore, in theory, beyond Sir Keir Starmer’s control.
On Monday, I argued in The Spectator that delaying such an increase, which is generally agreed to be necessary to restore some of the capabilities of the armed forces as well as acknowledging the instability of the current geopolitical situation around the world, would be a very serious decision with potentially huge negative consequences. The reasoning within Whitehall, as briefed to The Times, is that it would be politically, by which it is meant “electorally”, unacceptable to assign more resources to defence if that entailed cuts to other areas like education and health. A “senior government source” said:
If we try to hit the target by 2030 it will mean deeper cuts to public services in the run-up to the election. It feels like a non-starter.
I would note in passing that the defence of the realm is categorically a “public service” just as much as the provision of schools or hospitals, though I concede the political reality that it is not perceived by the electorate as having the same urgency or immediate impact.
The case for increasing defence spending is powerful and, I think, persuasive but of course it is not unanswerable. I appeared on Kait Borsay’s The Evening Edition on Times Radio (listen here from 01.39.55) to debate the issue with journalist and broadcaster Afua Hagan, though we agreed rather more than I had at first suspected, but I reiterated what I had said in The Spectator: I think we have to increase our spending on the armed forces, the arguments are very strong, but, if the government decides it cannot or will not do so in the immediate future, it must say so publicly and make very substantial changes to defence and foreign policy as a result. I stand by my conclusion: “anything else is a reckless betrayal of our national security”.
Later in the week, Camilla Cavendish explored the issue in The Financial Times. I found her thesis curiously inconsistent, agreeing unhesitatingly with some parts, flatly rejecting others and finding it from time to time either misleading or confused. I realise the article is behind a paywall but I will repeat the relevant issues below, because there are a few points which I think are worth making both to reinforce what I said in The Spectator (and have said many times before in several contexts) and as a broader discussion of the basic question: what should our defence policy be, and how much will it cost? I will try not to repeat too much what I’ve argued previously, but this might be a useful time to take stock.
The status quo is not an option
On the face of it, we are not arguing about a major shift in the government’s fiscal policy here. The United Kingdom currently spends a little over 2.3 per cent of GDP on defence, and the target which Starmer set out before the election of 2.5 per cent would not represent a dramatic increase in the context of overall spending. However, this does not mean that it is unimportant.
The unavoidable truth is that the armed forces are not currently equipped or resourced to carry out the commitments which are already expected of them. Setting aside the wild-eyed denialism of senior military and civilian leaders in the Ministry of Defence, this is not a seriously contested assertion. The House of Commons Defence Committee’s January 2024 report Ready for War? pointed to significant uncertainties over the readiness of the armed forces in a number of areas, as well as castigating the MoD for its secrecy and unwillingness fully to cooperate with the committee’s inquiry. The assessment in March by the Public Accounts Committee of the MoD’s Equipment Plan 2023-2033 was equally scathing, demonstrating a gap of at least £16.9 billion between capability requirements and budget, that is, between what the government says the armed forces can do and the funding it provides to enable them to do that.
This situation has not arisen suddenly. When I worked for the Defence Committee as long ago as 2006-08, it was common parlance to talk about the armed forces working at a “high operational tempo” or “running hot”, which were vague euphemisms for being very severely stretched. It is true that we were at that point still committed to two major operational deployments in Afghanistan and Iraq, but the drawdown of both of those commitments has not eased the situation. The new mot juste is that the armed forces have over the past decades been “hollowed out”. Sailors, soldiers and airmen have, in a sense, been unwittingly their own worst enemies on this matter: the armed forces pride themselves on a can-do spirit, an ability to do what is demanded of them by their political masters however ambitious or challenging. The flipside of this has been the development of a culture in which senior officials simply will not, or feel they cannot, say no when asked to undertake a task.
Mostly we have been lucky so far. There have not been any major failures caused by lack of resources, though we have come very close. Last August I wrote that none of the Royal Navy’s six attack submarines was at that point available for active duty and some had been in port for years, awaiting repairs or maintenance. This is still an urgent problem: with the retirement of HMS Triumph at the end of last year, we now only have the five Astute-class boats, of which, by my estimation, no more than one or two are currently able to be deployed. Given the Defence Secretary’s statement last week about the activities of the Russian spy ship Yantar in our territorial waters, which I explored here, our maritime security is under extreme and immediate pressure.
We are also potentially failing in our commitments to our allies. The British Army’s primary war-fighting unit is 3rd (UK) Division, based at Bulford Camp on Salisbury Plain. Under NATO’s New Force Model, the United Kingdom would deploy this division as the foundation of a British-led Strategic Reserve Corps using the Allied Rapid Reaction Corps (ARRC) command structure which we have provided since 1992. NATO’s military planning therefore takes as one of its assumptions the capabilities of this reserve formation: but it is widely acknowledged that we cannot currently deploy 3rd (UK) Division in anything like full-strength on a short timescale.
The British Army has one brigade permanently committed to NATO’s northern flank in Estonia as part of the alliance’s Enhanced Forward Presence (eFP). As Dr Jack Watling of RUSI has pointed out, that means that we have “one under-strength brigade which is short of enablers, and a deep recce-strike brigade double-hatted as both the divisional and corps fires group” remaining to contribute to the Strategic Reserve Corps, which is nowhere near adequate. We are lacking mass, logistics, munitions and other support arms, and that means we are not at the moment able to meet the promises we have made to our NATO allies. That has to change.
2.5 per cent is not a bonanza
These gaps in our readiness and capability mean, as I argued in CapX last year, that increasing our spending from its current 2.3 per cent to the target of 2.5 per cent would not mean a spending bonanza of procurement and increased capabilities. The Ministry of Defence’s chronic secrecy make exact figures difficult to achieve but it seems a reasonable estimation that the additional resources would more or less fill the existing gap between what we say we will do and what we are able to do: that is, it would make our defence policy more like a statement of intent than a series of implausible aspirations. It follows, logically, that if we do not increase spending by that kind of amount, the gap will at best remain.
This has already served to distort the debate to some degree. The Conservative government pledged in April 2024 to reach a level of 2.5 per cent of GDP by 2030, and, while many were sceptical that this would be achieved, Labour left itself exposed by refusing to commit to a timetable; in its manifesto, the party would only promise to “set out the path to spending 2.5 per cent of GDP on defence” without any date. Despite the Prime Minister stating repeatedly that it was a “cast-iron commitment”, ministers gave the impression of looking for wiggle room. But this has consumed much of the public attention, rather than thinking systematically or in detail about what the higher level of spending might mean.
Just a number, but numbers can be valuable
It has been said, perfectly reasonably, that 2.5 per cent of GDP is an arbitrary target for the country’s level of defence spending and is simplistic; that sum of money could be spent well or badly. It is certainly worth noting that, compared to non-nuclear states, the UK’s defence budget is skewed by the cost of maintaining an independent nuclear deterrent. The fleet of four Vanguard-class submarines which allow us to have continuous at sea deterrence (CASD)—that is, a submarine on patrol somewhere in the world, ready to launch its Trident nuclear missiles, every hour of the day since April 1969—will soon begin to be replaced by the new Dreadnought-class boats. The annual in-service costs of the deterrent prior to 2023 amounted to around six per cent of the overall defence budget, but they are now calculated differently as part of all nuclear-related expenditure under the Defence Nuclear Enterprise. Total spending on the DNE over the decade from 2023 to 2033 is projected to be £117.8 billion but the MoD has declined to give an estimated figure for the cost of the deterrent alone. However, the acquisition of the Dreadnought-class submarines is already in excess of £31 billion.
The figure of 2.5 per cent is arbitrary, as is the NATO minimum target of two per cent (which a third of member states are still failing to achieve). But it has value in terms of holding the government to account on its commitment to defence in a straightforward way which is intelligible to the public. It does not need to account for inflation, which a cash sum would, and it can be judged as considerably above the NATO minimum (though less than the amount spent by some of our allies: Poland is proportionately the alliance’s biggest spender, with 4.1 per cent of GDP going to defence, and the United States spends 3.4 per cent). There is no harm in keeping 2.5 per cent as a rough-and-ready yardstick, a way for voters to gauge at a glance how much we are committing to our defence policy; but we also need to remember that the breakdown of that expenditure is vital in terms of individual capabilities.
President Trump: noises off
One issue raised by Camilla Cavendish in The Financial Times is that a failure to increase defence spending will be poorly received in Washington DC. Donald Trump has long believed—not without justification—that the European members of NATO have underspent on defence over decades, relying on the ultimate guarantee of American security; he has concluded from that, again not entirely without good cause, that the United States has in a sense been taken advantage of (it is, of course, rather more complicated than that, but of which of his policies could that not be said?). His threats to reduce the US contribution to NATO or withdraw from the alliance entirely during his first term of office did play a part in forcing European governments to raise their spending levels (though perhaps not as completely and decisively as Trump and his supporters would like to believe).
Advisers to the President indicated in December that Trump now wants NATO allies to raise their target again, this time to five per cent of GDP. This would be an enormous challenge; for context, the UK has not committed that level of spending to defence since 1986, when the Cold War still dominated our strategic posture. The United States itself last exceeded five per cent of GDP in 1990, and even Poland would have to raise its defence budget by nearly a quarter to meet such a level. However, I think we should treat five per cent as a figure with a degree of caution: it is entirely possible, perhaps likely, that Trump has seized on a round number from the ether, on the spur of the movement. Indeed, it is very unlikely that he has given careful consideration to the capabilities and resources NATO needs and the level of spending required to achieve those.
According to The Financial Times, the headline figure of five per cent is an opening gambit, a negotiating tool. The President who published The Art of the Deal is, so the theory goes, aiming to use a variety of means to persuade allies to increase their commitment.
One person said they understood that Trump would settle for 3.5 per cent, and that he was planning to explicitly link higher defence spending and the offer of more favourable trading terms with the US. “It’s clear that we are talking about 3 per cent or more for [Nato’s June summit in] The Hague summit,” said another European official briefed on Trump’s thinking.
This is a possibility. I am sceptical of Trump’s much-vaunted negotiating skills (it is worth remembering that Tony Schwartz, the ghostwriter of The Art of the Deal, claims that Trump wrote none of it and was minimally involved in its content), and I have seen nothing in the President’s public demeanour over the last decade which indicates the kind of focus, calculation and attention to detail which successful negotiations require. However, it is perfectly possible that the generalised notion of starting with a high figure, knowing that you are willing to work downwards, is in his mind.
Meanwhile, NATO member states are reported to be discussing the idea of raising their target spending to 2.5 per cent of GDP in the short term and three per cent by 2030 at the next summit in The Hague this June. Whether or not this would satisfy the Trump administration, there is a clear and substantial challenge for Sir Keir Starmer. If the briefing to The Times is accurate and the UK is unlikely to spend 2.5 per cent of GDP until at least 2032, a NATO-wide target of three per cent by 2030 would put us in an extremely difficult position. Having been one of the few countries comfortably to meet the two per cent target since it was first set, we would instead be at risk of falling substantially behind the commitment made by our allies.
The threat is real
There has been an argument put forward again and again over the last year or two that the United Kingdom—both the government and the electorate—have not yet fully absorbed the threat to security in eastern Europe and more broadly which Russia poses. The former Chief of the General Staff, General Sir Patrick Sanders, warned at the beginning of his tenure in 2022 showed that the invasion of Ukraine demonstrated what Russia was capable of, and that the armed forces had to be trained and equipped “to protect the UK and be ready to fight and win wars on land”.
In January 2024, he argued that defence ought to be seen as a “whole-of-nation undertaking”, and, although he stopped short of calling for conscription, he observed “Ukraine brutally illustrates that regular armies start wars; citizen armies win them”. This speech, it was reported, had not been approved by Number 10 Downing Street or the Ministry of Defence, and Sanders was privately rebuked, though by that time his tenure as Chief of the General Staff was already approaching a premature end.
This was followed in April by a similar plea from James Heappey, who had stepped down a few days before as Minister of State for the Armed Forces. In The Daily Telegraph, he took up Sanders’s notion “that war is a whole nation endeavour”, and suggested that Whitehall was inadequately prepared for the scale of conflict which might erupt in Europe in the future. He drew unflattering comparisons with the level of planning which had been carried out during the Cold War; I wrote a response for The Spectator which admitted the force of some his accusations, but pointed out the different strategic situation and advised that a direct comparison was not particularly helpful.
Cavendish sums this up by saying, “In Britain, the threat still feels remote”. She is right, up to a point. I agree with Sanders and Heappey and several others who have called for a greater degree of urgency in addressing the problems within the armed forces and making a realistic assessment of the threats we face, not just from Russia, but around the world.
For all that, we have to look at the situation with a degree of nuance. Certainly, Russia is a threat beyond her immediate borders, as we have seen in the way Russian intelligence ships have been probing the undersea infrastructure in the English Channel and the Irish Sea, and may have been involved in physical attacks on cables underneath the Baltic Sea. It is not quite seven years since likely agents of the GRU, Russia’s military intelligence, attempted to murder Sergei and Yulia Skripal by Novichok poisoning in Salisbury; Sergei Skripal, a GRU officer who had acted as a double agent for the UK in the 1990s and early 2000s, is a British citizen, and the Russian state attempted to kill him on British soil, with no regard for other potential casualties.
At the same time, it is not complacent to say that the nature and scale of the threat the United Kingdom faces from Russia is different from that faced by Latvia, Lithuania and Estonia, for example, or by Poland. The Baltic states, because of their small size, are acutely vulnerable to Russian aggression; a serious and coordinated set of cyberattacks on Estonia in 2007 is believed to have been the work of Russia or of its proxies, while the Kremlin oversaw a three-year Facebook-based disinformation campaign in Poland from 2016 to 2019. If we think back to January 1991, as the Soviet Union was disintegrating, there was a last-gasp attempt to prevent Lithuania declaring its independence for which Mikhail Gorbachev was almost certainly in part responsible. Russia’s immediate neighbours face an existential threat, and the 11-year conflict in Ukraine is a testament to that.
It is self-evident that the United Kingdom does not face that kind of threat. To be blunt, we are at no risk of Russian military invasion. This does not mean Russia is not a threat to our national security. Lithuania, Latvia and Estonia, like Poland, Finland and Norway, all share a border with Russia and all are NATO members. They would expect the UK to join in a military response to any action against them under the mutual defence provision of Article 5 of the North Atlantic Treaty, and I would sincerely hope that we would honour that commitment.
In the same way, it is not in our interests for Russia to dominate eastern Europe. Vladimir Putin regards it as his country’s right to dominate the “near abroad” (blizhneye zarubezhy), the former Soviet states which surround the Russian Federation, while he has publicly denied that Ukraine is even a legitimate country or nation in its own right. I share the belief of many commentators that if Putin is allowed a settlement with Ukraine which he deems a success, it will be catastrophic for regional security, emboldening him to use military force and hybrid action against other neighbouring countries to gain control over them.
Nevertheless, I think we do need to understand and remind ourselves that the various members of NATO face a threat which extends across a spectrum of severity and immediacy. Camilla Cavendish notes approvingly:
In Sweden, every household recently received a government leaflet, “In Case of Crisis or War”, advising on emergency evacuation and how to store food if power fails.
That is good, and the Swedish government is right to have that kind of preparation in place. But it is clearly of a different order from that which is required in the UK.
The bottom line
This should not be seen as a critique of Cavendish’s article, an apologia for Sir Keir Starmer or a suggestion that we are dramatising the situation. Russia is a greater threat to European peace and security now than it has been since the end of the Cold War, and arguably more so than during the Cold War when the two great power blocs of NATO and the Warsaw Pact maintained some kind of balance of power. The United Kingdom is not spending nearly enough on defence to sustain our current strategic posture and global ambition; unless we are willing to scale back our international commitments massively, and with them the influence that we are able to exercise, there is simply no alternative to a substantially larger defence budget than we have now. Three per cent of GDP, while as arbitary a figure as any, is probably at least of the right order of magnitude, though Poland’s commitment may suggest it should be higher than that.
There are no easy answers. Increasing defence spending with a listless economy will inevitably require cuts in expenditure elsewhere, and there will be unpopular. But this cannot wait. We are currently unable to fulfil our military commitments, both those made in accordance with our own policy and those we have made to our allies. The armed forces are at best stagnant, and at worst deteriorating further.
More fundamentally, while the electorate understandably feels the effects of spending cuts to education, health, transport, housing and so on more immediately than it does to the armed forces, the defence of the realm, the protection of our borders and the projection of power abroad to uphold and defend our national interests is surely the foundation of government. From it, everything else flows; without it, nothing else is possible. It may feel like the Prime Minister is being asked to square a circle, but these “tough choices”, a phrase he likes to parade, are the price of high office. Action has to be taken now.