In Depth

Is it time for UK defence spending to rise?

Military budget has fallen substantially since 1950s – but Ukraine conflict may change this

Boris Johnson is under pressure to re-examine the government’s allocation for defence spending in the wake of Russia’s aggressive invasion of Ukraine and the growing threat to Nato.

Government sources told The Daily Telegraph that the Ministry of Defence could see its budget grow in Rishi Sunak’s spring statement on 23 March, “potentially to fund more deliveries of weapons to the Ukrainians or to improve Britain’s forces”. 

The current support offered to the Ukrainian army has come from existing departmental budgets, but a source suggested that this could change should Britain “contribute significantly more weapons”.

Two sources also told Sky News that defence spending was the most likely of any budget to rise in the chancellor’s spring statement, although “no formal submissions” have been made yet by the Ministry of Defence. 

Current spending

The government currently spends just over 2% of the UK’s GDP each year on defence, which amounted to “some £45 billion in 2021, or about £660 per person”, said Ben Zaranko, a senior research economist at the London-based Institute for Fiscal Studies, in a piece for The Conservation

In November 2020, the Ministry of Defence was awarded a £16.5bn funding boost, on top of its annual budget, representing the biggest rise in defence funding since the end of the Cold War. “I have taken this decision in the teeth of the pandemic because the defence of the realm must come first,” said Johnson at the time.

But overall the proportion of spending on defence has fallen substantially since the 1950s, when as much as 8% of the UK’s GDP was allocated to the department. Meanwhile, spending on the NHS has grown “from around 3% of GDP in the mid-1950s to more than 7% on the eve of the pandemic”, said Zaranko.

Lower spending on defence over the years – described by Zaranko as “the peace dividend” – is what has enabled successive governments to fund the UK’s growing welfare state without raising taxes. But an impact of Russia’s war in Ukraine could be the end of “healthcare without a higher tax burden”, he added.

Recent review

A major overhaul of the armed forces was announced by Defence Secretary Ben Wallace in March last year, which involved reducing the size of the British Army from 76,500 to 72,500 full-time, fully trained soldiers by 2025 “as part of a move towards drones and cyber warfare”, reported the BBC.

The controversial plan also involved cutting the number of tanks from 227 to 148 upgraded ones, the RAF losing its fleet of Hercules transport aircraft and the Royal Navy “retiring two of its older frigates early before new ones come into service”.

The PM defended the cuts last November, telling the House of Commons Liaison Committee that “we have to recognise that the old concepts of fighting big tank battles on European land mass… are over” and that there were “better things” for the UK to invest in when it came to defence.

The Indy100 news site described Johnson’s statement as having “aged spectacularly badly in light of Russia invading Ukraine”. Given the substantial fighting that is occurring on the ground in Ukraine, it looks like Wallace’s ambitious overhaul may need to be reviewed. 

In addition, said The Telegraph’s deputy political editor Lucy Fisher, “the ease with which Russian tanks have been attacked by Ukrainian forces and faced other difficulties has raised eyebrows among the British defence establishment”. One UK security insider told her that the MoD would need to “learn from Russian army failures”.

How does UK compare?

According to the Military Balance 2022 report by the International Institute for Strategic Studies (IISS), the UK has overtaken India to become the third largest defence spender in the world. 

Along with France, the UK is western Europe’s leading military power, but other countries are in the process of analysing their defence budgets and ramping up their spending on security. 

The IISS report pointed out that European defence spending grew by 4.8% in real terms in 2021, “more than any other region”, demonstrating that “European states have turned a corner in terms of their defence spending since Russia’s annexation of Crimea in 2014”.

On 27 February, prompted by the invasion of Ukraine, German Chancellor Olaf Scholz announced a €100bn defence fund to modernise the country’s military and an increase in annual defence spending to more than 2% of Germany’s GDP – a significant increase from the current level of below 1.5%. 

During a 30-minute speech to the Bundestag, Scholz “changed German security policy more radically than in the 30 years since the end of the Cold War”, said Peter Ricketts in Prospect magazine.

This announcement was particularly significant because Germany has long resisted pressure from the US and Western allies to raise its defence spending to 2% “in the light of its 20th century history and resulting strong pacifism among its population”, explained Reuters

Pressure from across political spectrum

Calls for the PM to increase the UK’s defence spending have come from all sides. 

Last weekend, former Conservative defence secretary Michael Fallon told The Sunday Telegraph that the case for more spending was now “unanswerable”. The same day, John Healey, Labour’s shadow defence secretary, told Sky News’ Trevor Phillips that he expected to see a “big boost to defence” in the forthcoming budget and that the government “must respond to increased threats to our security in Europe”.

A YouGov tracker which looks at the most important issues facing the country, including health, education and the environment, has shown a rise in interest in defence and security in recent weeks, and has doubled from March 2021 to February 2022. 

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