The Ministry of Defence has again insisted that the UK does meet Nato’s military spending targets, after a think tank claimed that the UK had missed the target in 2016 by £380m.
In 2015, former chancellor George Osborne committed the UK to spending 2% of GDP on defence each year until 2020-21.
However, in its annual review of worldwide defence spending, the International Institute for Strategic Studies (IISS) claimed that UK spending had fallen to 1.98% in 2016 as a result of the British economy growing faster than the defence budget.
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IISS director general John Chipman said that just two European NATO states – Greece and Estonia – met the 2% target, which was agreed by Nato members at a summit in 2014.
“Nonetheless, the UK remained the only European state in the world’s top five defence spenders in 2016,” said Chipman, who added that many European Nato members would need a significant rise in defence spending to meet the 2% target.
“If all Nato European countries were in 2016 to have met this 2 per cent of GDP target, their defence spending would have needed to rise by over 40 per cent,” he said.
An MoD spokesperson said the figures were wrong, and that NATO’s own figures show that the UK spends over 2% of GDP on defence.
“Our defence budget is the biggest in Europe, the second largest in NATO, and it is growing each year as we invest £178 billion in new equipment and the UK steps up globally, with new ships, submarines and aircraft over the next decade,” said the spokesperson.
A July 2016 NATO report said that the UK spent 2.21% of GDP on defence, though this was before the country’s GDP was revised upwards in late 2016.
NATO has yet to release its formal figures on members’ defence spending for 2016, but a spokesperson confirmed that the UK is one of just five members who met the 2% target in that year.
Defence secretary Michael Fallon told reporters that he would be urging other member states to increase defence spending.
Arriving at a NATO summit in Brussels he said: "I am looking forward to working with US Defence Secretary James Mattis on the steps needed to modernise Nato, to make it more agile and more responsive and on how we can persuade other countries to meet their fair share of the burden by increasing their expenditure to 2%."
Fallon last month told MPs that Britain “comfortably” exceeded the Nato target.
In its annual report, the IISS notes that there is “no shared understanding of what makes up a defence budget”.
NATO – whose members agreed in 2014 to work towards meeting the target by 2024 – includes defence ministry budgets and pensions as well as funds for peacekeeping and humanitarian operations, while the Unite Nations has a different definition for military expenditure.
Accordingly, the UK reported a defence budget of £36.9bn to NATO in 2013, but £39.8bn to the UN.
The IISS notes that NATO is now suggesting that to give a more accurate sense of how defence spending is being used, its members should aim to spend 20% of their defence budget on “major equipment spending”.
“However, this raises again a range of definitional and measurement issues regarding what ‘major equipment spending’ actually comprises,” wrote IISS researcher fellow Lucie Beraud-Sudreau and director Bastian Giegerich in a blog accompanying the report.
“Moving beyond symbolic figures of 2% or 20%, what should matter is how these tremendous sums of money concretely translate into cohesive defence capabilities across the Alliance.”