The government will need to be clearer on how the spending increase will be funded and where the UK will direct its focus.
Prime Minister Rishi Sunak has pledged to increase UK defence spending to 2.5 per cent of GDP by 2030, saying this would deliver ‘an additional £75 billion for defence by the end of the decade’.
Increasing the budget is a welcome boost for Britain’s armed forces and a prudent move in an increasingly hazardous geopolitical environment. However, it does not change the fact that even if this spending is fully delivered, hard choices remain for Britain’s military. For the UK to fund its existing ambitions, and respond to growing threats to European security, it may need to set a target closer to 3 per cent.
The increase is welcome – but less than it seems
As the Institute for Fiscal Studies (IFS) has pointed out, the amount pledged only works out at £75 billion if an assumption is made that defence spending would have been frozen every year from now until 2030, rather than rising in line with the UK’s existing defence spending of approximately 2.3 per cent of GDP. If that existing commitment is taken into account, the rise amounts to £20 billion total from now until 2030.
The increase may need to be used to plug existing funding gaps rather than provide additional resources.
This is still a significant figure. But the government has said the increase will be funded by cutting civil service jobs, without specifying how such cuts could feasibly add up to this figure. If the increase is to be more meaningful in practice than former prime minister Boris Johnson’s 2022 pledge to increase defence spending to 2.5 per cent of GDP by 2030, more specific choices will need to be made.
The increase may also need to be used to plug existing funding gaps rather than provide additional resources. This year’s UK Defence Equipment Plan for 2023-33 has a gap of £16.9 billion between its requirements and its budget. The UK Public Accounts Committee has further warned that this deficit does not include estimated costs for all the capabilities the government has asked the armed forces to deliver – so there may be further budget gaps to fill.
The UK needs to make choices about its military
The prime minister framed the spending pledge with an eye-catching top line: that ‘an axis of autocratic states like Russia, Iran and China are increasingly working together to undermine democracies and reshape the world order.’ While this is true, it does not necessarily cover the span of tasks the UK’s armed forces may be called upon to perform between now and 2030. Parliament and other experts have raised concerns in the past that the UK military is being asked to do too many things – provide significant capabilities to NATO in Europe, potentially engage in disaster response, expeditionary tasks, military diplomacy, and sometimes respond to civilian crises at home.
Moreover, this framing risks conflating three distinct challenges. The prime minister’s speech implicitly acknowledged that the UK’s top priority is Ukraine. Of the three areas Sunak highlighted as the focus for the ‘bolstered defence budget’, backing Ukraine against Russia was the only specific challenge mentioned. The remaining two were more general: upgrading the UK defence industrial base and armed forces modernization.
This raises an important question: where will the UK armed forces focus their efforts? A role in the Middle East seems certain, given their ongoing contribution to the US-led Operation Prosperity Guardian in the Red Sea, defending international shipping against the threat posed by the Iranian-backed Houthis.
The Indo-Pacific is currently the focus of long-term British defence industrial collaborations, notably the AUKUS pact with Australia and the US, focused on cooperating on nuclear submarines and critical technologies; and the Global Combat Air Programme (GCAP) alongside Italy and Japan.
But the UK will struggle to upgrade its military presence in either the Middle East or Indo-Pacific while war still rages in Europe – even with an increased defence budget. The spending increase does not obviate the need for tough choices on where to focus, with the lion’s share of attention increasingly going towards Ukraine and the UK’s contribution to European security.
The government needs to make the trade-offs clearer – both in terms of how it will fund the increase, and where the UK is directing its efforts.
The government’s pledge on defence spending has also come in the year of a UK general election. The opposition Labour Party is also committed to a 2.5 per cent of GDP spend on defence but, as shadow attorney general Emily Thornberry clarified, Labour would hit the target ‘when circumstances allow’.
Labour has indicated it largely shares the government’s view that the global threat environment is getting worse. Shadow Foreign Secretary David Lammy described the outlook in mid-April, highlighting China’s accelerating ship-building capacity, and a need to take seriously the threat from Russia and show the US that ‘Europeans do enough to protect their own continent’s security’. Meanwhile, Labour leader Keir Starmer has reiterated Labour’s commitment to the UK’s nuclear deterrent.
In principle, the spending boost is welcome. It signals to allies and to defence industrial partners that there has been a shift in mindset about the seriousness of the threats the UK faces. But the danger remains that the UK will raise expectations it can play a significant role in multiple theatres at once, without sufficiently resourcing those ambitions. The government needs to make the trade-offs clearer – both in terms of how it will fund the increase, and where the UK is directing its efforts.
For Britain to fund its ambitions for a global defence role, it may have to spend closer to 3 per cent of GDP.
Rishi Sunak made the spending pledge during a speech in Warsaw. It is worth noting that Poland spent 4 per cent of its GDP on defence in 2023 and urges NATO members to aspire to a 3 per cent target. For Britain to fund its own ambitions for a global defence role, it may indeed have to spend closer to 3 per cent of GDP. The UK government should also explain more clearly where its priorities lie. Although new threats are appearing across the world, the UK’s most meaningful contribution will likely be to security in Europe.
Source: Chatam House