As elections loom, both the main British political parties have set their sights on another major boost to the UK’s military spending. Richard Reeve analyses what capabilities this aims to fund and what it might mean for the UK’s already exceptional global role.
Rishi Sunak’s 23 April announcement that UK military spending will increase steadily to reach 2.5% of GDP (a measure of national economic output) by 2030 is the latest salvo in a battle for supremacy over defence ahead of the general and even next week’s local elections. It follows a similar, less time-bound pledge from Keir Starmer on 12 April, with both main party leaders having also visited the UK’s nuclear submarine factory in Barrow in the last month to reaffirm their commitment to the nuclear weapons renewal programme.
The Prime Minister’s bold (and disputed by economists) pledge to commit £75 billion in new money to Defence is in stark contrast to the Labour Party’s ignominious retreat in February from its prior pledge to commit £28 billion per year (not all of it new) to green investment. Or, indeed, both parties’ insistence that there is effectively no new money for social protection, and the Conservatives’ very recent budgetary narrative that tax and spending cuts are essential.
Accepting that the geopolitical situation in Europe is genuinely of rising concern as Russia takes the upper hand over Ukraine and a critical US election approaches, it is important to raise some major structural issues with military priorities, posture and spending in the UK. These make raising spending targets to 2.5%, 3% or beyond more to do with raising the baseline of Britain’s already exceptional international prominence than with raising its capacities to defend itself or Europe. What the military gains also has very clear multi-billion pound opportunity costs for work to tackle climate and environmental breakdown, pandemic disease, and staggering poverty, inequality and exclusion, all of which also present clear and present dangers to the people of the UK and beyond.
Over the next year we’ll be hearing more about the various parties’ and the next government’s national strategies to confront these and other threats. Aligning national ambition and resourcing will be critical to this, not just between Defence and other departments but within the MOD and its overloaded agenda. This article aims to pose some critical questions on prioritisation and resourcing that politicians are likely to sidestep in their pre-electoral zeal to position themselves as ‘strong on defence’.
Political arms racing
The main political parties have now broadly staked their positions on military spending, albeit giving themselves considerable latitude and with only one of them likely to be in a position to deliver on commitments after the coming general election.
The Conservatives obviously already control the national purse strings. According to government figures, this year’s military budget is £64.1 billion or 2.32% of GDP, although that includes things like intelligence, military pensions and support for Ukraine. Last year’s spending was about £54.2 billion or 2.07% of GDP on defence according to NATO data for 2023. SIPRI, using less restrictive criteria, estimate it at £62.7 billion or 2.26% of GDP for the same year, showing how definitions and final figures vary. So the gap between current reality and the 2.5% aspiration is somewhere between £6 billion and £12 billion per year in today’s money.
Labour has set its target at exactly the same 2.5% and on the same terms (“as soon as resources allow”) as Sunak’s pre-23 April position. Unlike Sunak, Keir Starmer expects to be in government over the next five years, but hasn’t set out how these additional billions in resources might be allowed for under Rachel Reeves’ very stringent spending limits. Watch this space for a Labour response that tries to outflank the Conservatives on military spending.
Aiming to outspend both main parties from the (far) right is Reform UK, which has promised to meet 2.5% within three years and 3.0% by 2030. Incumbent Defence Secretary Grant Shapps, his predecessor Ben Wallace and some other Tories have made similar calls recently, as did Liz Truss in her brief premiership. That means an additional £18-25 billion or so per year in today’s money, equivalent to a 25% increase in basic VAT, according to Malcolm Chalmers’ estimates from 2022.
Other parties to the centre and left have set lower targets. The Lib Dems’ new International Security Policy, approved in March, sets the NATO minimum of “at least 2% of GDP” – same as its 2019 manifesto – so possibly a small cut, perhaps to finance its more prominent commitment to increase official development assistance (ODA).
The Scottish Government’s new policy paper An Independent Scotland’s Place in the World also commits to 2%, reflecting its aspiration to join NATO as an independent state. Presumably this will be the SNP’s official position, an increase from the c.1.7% indicated in its 2013 white paper.
The Green Party’s commitment is more open to interpretation. While the party shifted to qualified endorsement of NATO membership last year, its Peace, Security and Defence Policy supports an “end to fixed minimum level of military spending by each [NATO] member state to be replaced with a flexible level set by consensus that will reflect the current military and strategic landscapes.”
Three black holes and a silver bullet
Notwithstanding the darkening of the strategic landscape since 2022, we have been here before in terms of promises that a new injection of cash will fix and ready the UK’s armed forces. In November 2020, during the pandemic and while his own Integrated Review was underway, PM Johnson pushed up defence spending from 2.08 to 2.35% of GDP, mainly to plug the mass of unfunded procurement commitments. Slashing the overseas aid budget by 30% provided a near direct transfer of funds from development to defence. By 2024, the new money was gone, the economy moribund, and bigger gaps had emerged.
While, as with any department, there is much capability that new money could be buying and employing, there are good reasons to think that new cash injections will not fix the underlying problems, even if the next government can find the extra money.
Posture and persistence
The first is an inability to prioritise resources that stems from a political unwillingness to define what the British Armed Forces are for. Put simply, the UK got used to being a military great power with global territory and interests to uphold. What to do now that the Empire and economic clout has gone is a question that generations of politicians have ducked, other than to coat-tail the US superpower. Thus there remains a commitment to retaining ‘full-spectrum’ military capabilities with global presence but very little depth; an aspiration to lead without much to follow. Military posture has become more about a façade of influence than actual capability.
For the UK, the default posture is of global power projection: to maintain the ability to strike enemies “at a time and place of our choosing”. That primarily means a focus on sea power, both missile-armed submarines and surface ‘strike groups’ focused on aircraft carriers or amphibious assault ships (‘littoral strike groups’). But it also means an air force with global bases and logistics and, increasingly, an army trained, equipped and ready to fight anywhere from Arabian desert, Bornean jungle and Kenyan savannah to polar Norway and urban Europe.
Unsurprisingly, such a globally exceptional posture is exceptionally expensive compared to territorial defence in Europe and inevitably leads to over-stretch of a small force unable to focus on any one region. Surprisingly, in the context of a professed prioritisation of European defence and reductions in the number of active personnel, it has been recently supplemented by additional commitments to ‘persistent presence’, generally of smaller units in many additional countries. These are typically Army trainers and advisers as well as smaller Royal Navy vessels.
Budget indiscipline
This strategic paralysis is witnessed in the perpetual crisis of the Defence Equipment Plan, a rolling ten-year plan for equipment the MOD plans to procure. Currently it officially has a £16.9 billion (6%) shortfall. This gap would increase by at least another £11 billion if it included all the equipment the Army actually plans to acquire and depends on £16.2 billion in ‘efficiency savings’. Not only does the Plan allow the three armed services to compete with one another but it is subject to perpetual optimism bias as economic growth is over-estimated, inflation is under-estimated and the MOD plans on the basis of political aspirations rather than firm funding commitments. A few monopoly supplier companies also have enormous leverage to set their own prices, not least BAE Systems.
Thus, costs inflate, quantities diminish, timelines slip and everyone loses sight of what the equipment was wanted for. Last month’s inquiry report from the Commons Public Accounts Committee (PAC) provides yet another damning indictment of the current Plan, finding 44 of 46 scheduled MOD equipment programmes are currently off-track. As the PAC put it, “The MoD has not had the discipline to balance its budget by making the difficult choices about which equipment programmes it can and cannot afford.” Both Conservatives and Labour have put forward plans to reform defence procurement but a myriad of such reforms have been tried and failed in the past.
Nuclear expenditure
Most startling of the PAC’s findings is that the 10-year budget relating to nuclear weapons programmes had increased by 62% (or £38.2 billion) in one year to £99.5 billion. While £34.5 billion of this seems to be accounted for by the movement of centrally held funds into the MoD’s allocation in 2023, it is still a stark reminder of how colossal the so-called ‘Defence Nuclear Enterprise’ (DNE) is and how difficult it is keep track of its budget. Indeed, the actual 10-year equipment spending plan for the DNE, also including conventionally armed but nuclear-powered submarines, is £117.8 billion, of which £7.9 billion is currently unfunded.
Thus, over the next decade, the nuclear programme is forecast to account for nearly 39% of all planned capital expenditure or 20% of the entire forecast defence expenditure even before crewing, operating, training and many other costs are factored in. That’s two- or three-times as large a share of the UK defence budget as what the US plans to spend on nuclear capabilities, and of course represents a cost that non-nuclear militaries simply do not incur.
Moreover, it seems unlikely that this is the last we hear of multi-billion pound fund transfusions into the DNE, given that there is huge uncertainty over the viability of major component projects, including next generation submarine nuclear propulsion (rated: ‘unachievable’) and the new atomic warhead (‘Astrea’). The MOD has made it clear that the DNE is its absolute priority, has ring-fenced funding to it, and will delay spending to conventional equipment programmes to keep it on-track.
AUKUS: The white elephant in the room
One big development in defence policy since 2021 neatly ties together these three budgetary black holes that incline towards ever greater military expenditure and declining conventional defence capabilities within Europe. Announced in September 2021 and refined in March 2023, the Australia-UK-USA (AUKUS) partnership aims to facilitate the co-development of the most sensitive military technologies in the context of common fears of a more militarily capable and assertive China. Central to this is the construction of UK-designed nuclear-powered submarines for Australia and the deployment of US and UK attack submarines (conventionally armed) to Australia as a standing presence from 2027 onwards.
As I’ve written elsewhere, this additional UK commitment to regularly (if not permanently) base one of its six or seven attack submarines in Perth would represent a real step change in its so-far limited military ‘tilt’ to the ‘Indo-Pacific’. This would entail a major financial cost, a significant risk of entanglement in, or even precipitation of, a major war with China, and an opportunity cost to defence of the UK homeland, Europe and the North Atlantic. It looks like another difficult choice of priorities that the government and MOD have not so much ducked as dived headlong into. Indeed, AUKUS’s political importance can be seen in the additional £3 billion found for submarine manufacturing (by BAE Systems) from an otherwise tight-pursed Treasury last year.
Among the drivers of British enthusiasm for AUKUS has doubtless been the idea that the struggling British DNE can avoid crisis through economies of scale. That looks increasingly like a sharing of risk with Australia and an upfront commitment of billions in UK investment to fast-track the design and production of submarines that will only enter service (in the 2040s) if Australia sustains its multi-decade commitment of around $10 billion per year and the support of a sceptical US Congress.
In one sense, AUKUS may have achieved its intent even if (as I and some others think likely) Australia never receives the massively expensive AUKUS-class submarines. The promise of thousands of skilled jobs and billions of pounds in export revenues, coupled with the determination of the US government to weave the UK and other European allies into its Pacific alliances, has convinced the Labour Party government-in-waiting to rethink its mooted downgrading of the UK’s military presence in the ‘Indo-Pacific’.
So whereas the two big parties have embraced AUKUS as a silver bullet for the ailing nuclear enterprise, it may actually prove more of a political weapon irrespective of whether it progresses industrially or militarily. Like the DNE, the British commitment to projecting power into the Pacific looks like it has become too big (politically) to fail. That risks locking in costs not just for the next government but for generations of Britons to come.
A crisis of exceptionalism
The irony of the current paralysis of the debate over UK military spending plans is that, for all its exceptional global presence and commitments and determination to perpetuate its still-exceptional nuclear weapons capabilities, the UK is no longer the exceptional military spender that it was when the Conservatives assumed power in 2010. Indeed, since about 2014, the UK has spent just less than the world average share of its economy (which has fluctuated around 2.2% of global GDP) on its military.
The UK is still the world’s sixth biggest military spender overall, according to newly released figures from SIPRI for 2023, second only to Russia within Europe, and second to the US within NATO. However, looked at as a percentage of GDP spent on its military, the UK had fallen from third in 2014 (behind the US and Greece) to tenth (of 31) in 2023. Whereas the UK spent about 70% above the European NATO mean of 1.25% of GDP on defence in 2014, it now spends about 12% more than the 2023 mean of 1.85%. In the next year or two, the UK will probably fall behind Germany in total military spending for the first time since the 1970s and the mean European NATO military expenditure will probably reach 2%, the alliance’s current minimum spending baseline.
Figure 1: UK, European, NATO and World military expenditure as % of GDP, 2014-2023.
That leaves the UK looking like an uncharacteristically average military spender in Europe. Factoring in that the British military is disproportionately oriented to projecting its power and maintaining, even bolstering, its presence from Faslane to the Falklands and the Philippine Sea, and that its expenditure is exceptionally and increasingly oriented towards nuclear weapons, it is unsurprisingly not the major conventional military actor within Europe and the North Atlantic that it was in the late 20th century.
While this is a poor fit with the UK’s self-image as a global military power and the most capable military in Western Europe, this unaccustomed normalcy need not be a bad thing. If the UK does want to be a globally capable conventional and nuclear-armed power with the largest military spending in Europe (a combined status it has not had since the late 1960s) it will need to spend above 3% of GDP on its military, probably closer to the 3.5% of GDP that the US spends on its truly global, full-spectrum force. That is a tough ask and begs the question: why does the UK believe it should (re)assume this exceptional role now, long after its relative decline from global empire to one of a dozen larger ‘middle powers’? As the rise in European spending shows, it is not as if the UK is standing alone in protection of a passive, demilitarised Europe. Nor does it seem likely, whatever happens with AUKUS, to regain significant military leverage in the ‘Indo-Pacific’.
Ambition and over-reach
Answering this question is likely to take us deep into narratives of the UK’s place in the world, its capacity to be a ‘force for good’, its relationship to international law and the post-1945 ‘rules-based international order’, and a closer interrogation of what its ‘national interests’ are and who shapes them. That is all to the good, a necessary public conversation long deferred, perhaps occluded by a yearning to matter to Europe, the US and the world.
Should the response to the question of British exceptionalism be that the UK has collective responsibilities and common interests with its peer states – not least but not only other democracies – rather than endless conflict and geostrategic competition, the challenge is not only to lean in to ‘normality’ but to work for a better collective normal, the promise that the post-1945 and post-1989 settlements only partially delivered on. We need to calm not only our national obsession with ‘punching above our weight’ but our obsession with punching at all.
Military posture and spending is fundamentally a question of politics and national ambition. Before the catastrophic Anglo-American military adventurism of the early 21st century that national ambition was high, probably exceptional, almost certainly hubristic. Strategic defeat and retreat abroad, economic stagnation, strains in the Union, Brexit and migration psychoses, real threats from Russia, US obsession with primacy in the Pacific, anti-European sentiment from Trump, massive reputational damage over Middle East policy, and the belated realisation of the colossal financial and opportunity costs of the nuclear weapons programme have all combined since the 2010s to give a very much more complex and confused context of ambition and resources.
It may be tempting for British politicians to prepare for the next election as though it is simultaneously 1938 and 1998, to put the homeland on a ‘war-footing’ while offering our services as world policeman. Yet the world, Europe and the UK have changed. The corollary of not setting realistic priorities is that resources have to expand indefinitely. If they don’t, then the UK faces a new reckoning with this crisis of exceptionalism. For all our leaders’ recent obsessions with Thatcherism, Reaganism and Blairism, the next British government may find its dilemmas more akin to those facing the over-stretched USSR in the 1980s.
The views and opinions expressed in posts on the Rethinking Security blog are those of the authors and do not necessarily reflect the position of the network and its broader membership.
Image Credit: Warsaw, Poland, 23 April 2024. Prime Minister Rishi Sunak holds a press conference with the NATO Secretary General Jens Stoltenberg. Picture by Simon Walker / No 10 Downing Street via Flickr.
Richard, this is a great & v helpful article. I’ve just been at an event on UK crisis policy, where there was much talk of HMG needing to do more with less money. We need to underline the trade offs — when we fail to invest in development and conflict prevention, our world incl UK strategic environment is more dangerous, less secure.
Thanks Megan. Yes, it’s such an easy response to elections to be pledging money to the military instead of conflict prevention. And Labour falls for it every time.
Why Oh why is nuclear capability so important? I have always been keen on scenario writing. What scenarios have we of the instances in which a British nuclear response would be activated? Any serious or sustained nuclear exchange would make the world uninhabitable. No sane aggressor would want to colonise the territory on which it has launched a first strike. If we particularise Russia and China, their land masses are so large that their survival from a nuclear exchange would be less catastrophic than ours. This leaves the USA as the only realistic democratic player, not the UK. And do the Foreign Office and MOD compare notes on conflict resolution? We Quakers have historic credentials in ‘quiet diplomacy’ which we are beginning to think about afresh.