On 25 February 2025, the day before he was due to fly out to the US for talks with President Donald Trump, British Prime Minister Sir Keir Starmer made an announcement that was to be expected, given Trump’s insistence that the UK, along with all other NATO member-states, contributed its fair share to support the transatlantic military alliance. Starmer increased the UK’s defence spending from 2.3% to 2.5% of GDP (gross domestic product) from April 2027, equating to £13.4 billion a year and to be funded by cutting Overseas Development Assistance (ODA) from 0.5% to 0.3% of GNI (gross national income). He also committed to further uplift defence spending to 3.0% in the next parliament. Starmer was unhappy at having to make this tough choice, and said that ODA would be restored to 0.7% of GNI when “fiscal conditions allow.”
“Targeted investment” in defence will “rebuild stockpiles, munitions, and enablers” and modernise the Armed Forces, “supported through improved productivity, efficiency, and financial discipline across defence.” Increased defence spending will expedite growth in many sub-sectors of industry, including “AI, autonomous systems, combat air, cyber, missiles, nuclear submarines, quantum, shipbuilding design, and space”, and also benefit major defence contractors and key players in the military-industrial complex, such as BAE Systems, Lockheed Martin UK, and Rolls-Royce. All of this activity could be expected to boost economic growth, in keeping with the Labour government’s primary agenda.
The UK spent £53.9 billion on defence for the 2023/24 financial year. The Defence Expenditure Limit (Resource and Capital) for 2024/25 was then set at £56.4 billion. British expenditure on defence has fluctuated considerably, depending on circumstances, peaking at 52% of GDP in 1945 before steadily declining to 7% of GDP by 1959, apart from a spike in spending during the Korean War. Defence spending was maintained at 5.4 to 5.5% of GDP during the 1970s, declined to 5.3% of GDP in the mid-1980s, and stabilised at 4% of GDP in early 1990s. By the early 2000s, defence spending was down to 2.3% of GDP. Between 2015 and 2020, it even fell below 2% of GDP.
The Defence Investment Pledge of 2014 committed the NATO heads of state and governments to spend a minimum of 2% of GDP on defence, both to address the imbalance between the contributions of the US and European members, and to ensure operational readiness of the alliance for collective self-security under Article 5 of the Washington Treaty, signed in 1949. The UK is currently the only European member of the NATO able to deploy nuclear, offensive cyber, precision strike weapons and fifth-generation strike aircraft across the North Atlantic region.
Defence spending covers pay and retirement pensions for civilian and military personnel of the three Armed Forces (British Army, Royal Navy, Royal Air Force); equipment (weapons, vehicles, aircraft, ships, ammunition, and other military hardware); infrastructure (military bases and facilities); technology; operational expenses (day-to-day operations, logistics); training; research and development; and peacekeeping and humanitarian aid operations. Payments to service personnel make up the largest single source of spending.
There are many challenges, which increased spending alone will not automatically solve. For example, as of 1 April 2024, the UK Armed Forces had a total of 183, 230 personnel, including Regular and Volunteer Reserve forces- a decline of 5,590 (3%) since 1 April 2023. All three of the Armed Forces have consistently failed to meet recruitment targets for the preceding five years. The recruitment process is unduly prolonged, bureaucratic, and inefficient. Retention of recruits is hampered by low and stagnating pay, substandard accommodation, inadequate welfare and support services, and mental health issues, not to mention concerns over the morality of recent conflicts in which British soldiers have participated.
The arbitrary figure of percentage of GDP spending on defence is just another target, directed toward the goals of military capability, operational readiness, and thereby national security. With the advent of new military technologies, and the ongoing updates of earlier generations of combat vehicles, aircraft, and warships, extra spending must target areas that are likely to make a difference in future conflict. Conventional warfare, traditional weapons systems, and the race to stockpile weapons are making way for remote-control operations, satellite surveillance, advanced conventional weapons, autonomous weapons, AI-powered systems, drones, precision targeting, high-energy laser, robotics, cyber and information warfare, hypersonic missiles and aircraft, and military operations in space-to mention a few. Even as the Royal Navy gets new ships and submarines for its ageing fleet, the RAF acquires new aircraft, and the Army strives toward rapid deployment of land forces, the nuclear deterrent is also being upgraded. Meanwhile, chemical, biological, radiological and nuclear (CBRN) weapons remain a constant threat. Targets for recruiting personnel to the armed forces should reflect the nature and extent of threats to the UK’s national security, and the need to ensure contingent capability, maintain operational readiness, and uphold international obligations.
Consequently, the armed forces have many unmet needs, all in need of extra funds. After decades of managed decline, the recent uplift to defence spending, to take effect in two years, is little more than a small first step on the way to restoring Britain’s defences in an increasingly unstable world, in which negotiation and diplomatic efforts are increasingly taking a backseat. The promised national security strategy for the UK is sorely awaited.
Ashis Banerjee