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The Government’s 2% Defence spending target: Does It Really Matter?

Ben gives us the low down on the new budget plans for defence spending-and why it matters.

Ben Harris 

Naked Politics Blogger

Chancellor George Osborne’s first budget as part of a Conservative majority government delivered a few weeks ago in the House of Commons was one that was both groundbreaking and hotly debated. With the introduction of a new National Living Wage and controversial changes to welfare spending, there were indeed some juicy talking points. However, there was something else announced during that speech (which ran for over an hour) which was arguably just as significant – a commitment to spend 2% of GDP on defence every year for the next 5 years.

So why 2%? The 2% figure is the target set by the North Atlantic Treaty Organization (NATO), of which the UK is a member. Set up during the Cold War by the US and its main allies, NATO was originally designed to defend Western Europe against the Soviet Union. With the collapse of communism, that threat has now passed but NATO as an alliance continues to exist, with events in Ukraine and Russia arguably making NATO more relevant now than at any point during the last two and a half decades.

While the 2% target on military spending is non-binding, meaning no NATO member state is actually legally obliged to meet it, it does have symbolic significance. With the crisis in Ukraine and the march of extremist groups such as ISIS in the Middle East, the issue of how much we spend on our armed forces has come under greater scrutiny in these times of austerity. Since 2010, UK defence spending has fallen approximately 0.44%. This may not seem like a lot, but it amounts to hundreds of millions of pounds. These spending cuts have not gone unnoticed either – senior figures in both the British and American military establishments have voiced concern about the UK’s diminishing military capabilities.

As with most government policy however, there is a political angle to this commitment to defence spending. Although funding for other government departments such as health and welfare were bigger issues during the recent general election, it is also true that the defence budget has come under more scrutiny in recent years. While defence has long been an issue that the Conservatives have tended to be more at home dealing with (similar to Labour and health, for example), they risked being outflanked by their rivals. During the election for example UKIP, who have seen surging support in recent years and were threatening to harm the Conservative vote in many key constituencies, pledged to keep UK defence spending above 2%. One of the candidates for the Labour leadership, Liz Kendall, also pledged to meet this target. By making this commitment, Osborne effectively nullified a potential issue at the next election.

Interestingly, the pledge to spend 2% of GDP on defence isn’t quite as significant as it might seem. Even during the last 5 years of cuts, the country has still managed to meet the NATO target every year, albeit this will no longer be the case if the current rate of cuts continue. That said, with the economy improving (and thus GDP rising) defence spending will have to rise too in order to meet the target and this could potentially prove to be a barrier to the Chancellor’s plans of cutting the deficit.

Nonetheless, the announcement by the government that it plans to meet the NATO target signifies two things. Firstly, that Britain will remain one of the world’s biggest spenders on its military, beaten only by the likes of the US, China, Russia and Saudi Arabia. Secondly, it signifies that despite continued questions over the declining power of Britain internationally, David Cameron and his government intend to keep Britain as an active player on the world stage and are willing to use force if necessary, such as against ISIS militants in Iraq and Syria. Of course, it is one thing to make a pledge on spending but it is another thing entirely to keep to it – only time will tell whether we are still spending at least 2% of our GDP on the military this time 5 years from now.

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