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Sir Keir Starmer announced last week that shortly before the trip met with Donald Trump, “we will announce that the declaration will spend 2.5% of GDP on defense. However, given the serious threat we face, we will push this goal forward, so we have a goal in 2027.” In addition, the increase in spending will be funded by reducing overseas development spending from 0.5% to 0.3% of gross national income.
The Prime Minister did point out: “In the face of ongoing and generational challenges, European countries must do more for their defense. This is indisputable.” However, what the UK will do is to “comply with economic and fiscal conditions” so that the increase in defense spending is insignificant and the additional costs borne by the public is zero. This is not a serious response to the challenges facing the UK. It is a fact that the announcement is announced. It became even more realistic after meeting Volodymyr Zelenskyy at the Oval Office on Friday. European security now depends on Europeans. The UK must lead.
The House of Commons Defense Committee has published a report in February 2024 saying that there are many shortages of capabilities within the British armed forces. according to Establish defense capabilities in Europepublished by the London Institute of International Strategic Studies in November 2024, is similar in most other European forces.
Furthermore, despite increased spending on defense in recent years, these shortcomings remain. This is partly due to the size of the historic backlog. This is also because of the urgent need to transfer equipment to Ukraine in the past three years. This leaves a huge loophole that NATO members of Europe, including the UK, must fill as soon as possible.
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Given the scale and urgency of these pressures, spending on defense will need to rise significantly. Note that in the 1970s and 1980s, this was 5% of the UK GDP or more. In the long run, it may not need to reach these levels: Modern Russia is not the Soviet Union. However, it may require a height during accumulation, especially if the United States does withdraw. It may be wise to temporarily increase investment by borrowing. But if defense spending is permanently higher, taxes must rise unless the government can find enough spending cuts, which is doubtful.
In the long run, higher income taxes will be the best way to share the increased burden on defense. However, labor is squeezing aid while the United States is blowing up USDA. Under David Cameron, the UK has cut its share of aid to 0.5% of Boris Johnson. Now it’s about to reach 0.3%, nearly half of which may be used for asylum seekers.
Giving up aid to the poorest in the world is the wrong way to fund defense needs. International Development Minister Anneliese Dodds’ resignation is correct. The funds released are too small. Furthermore, it will increase global pain and weaken the UK’s voice in the world. The decision is a signal of escape and cowardice.
The fact is that the “peace dividend” ended with a war returning to Europe. Britain can and must spend more on defense. If it does not, it will not be able to make a voice in its continent’s common defense, or even defend itself. It must play a leading role in strengthening NATO’s European pillars.
Fortunately, the UK can also actually expect economic returns from its defense investment. Historically, war has been the mother of innovation. This is true in World War II. Israel’s “start-up economy” began with its military. The Ukrainians have now completely changed drone warfare. John Van Reenen, chairman of the Economic Advisory Council for the British Chancellor Rachel Reeves, co-wrote a paper that believes that a 10% increase in defense research and development can trigger a 4% increase in private R&D. In another co-authored paper, he argued that these benefits depend on open and competitive funding for defense innovation. But the key point is that spending more on defense is not only a necessity, but not just a cost, although both are real. If done in the right way, it is also an economic opportunity.
Today, Britain faces a grim new reality. This is unlikely to be temporary. With Russia’s courage and the evacuation of the United States, the British government must not pretend that there is little change and there is little extra fee. Starmer must convince the public to recognize the reality today. So far, he has been too timid.
martin.wolf@ft.com
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