The combined US-Israeli strikes against Iran have displaced the Russia-Ukraine war from the headlines and brought British defence policy into focus once again. What is the UK doing, or trying to do? Do we agree to Donald Trump’s call for help? Do we send half of our fleet as the French are appearing to do? There are inevitable questions about readiness and hollow forces, and about making the right or wrong strategic choices. But, often, the conversations and accusations turn back to the same thing: Money.
At every turn, ministers, opposition politicians and journalists obsess over the percentage of GDP that a country spends on defence. After the 2014 Nato summit in Wales, the agreed 2 per cent target became a near-sacred benchmark, treated as shorthand for national commitment and capability. Since then, defence spending has risen rapidly in eastern Europe, and crept up in the west.
The Hague summit in 2025 set a new target of 5 per cent by 2025, comprised of 3.5 per cent on core defence requirements and 1.5 per cent on wider security and resilience.
However, this metric is as misleading as it is blunt. Judging defence by GDP share is like judging how good your house is by the fraction of income you spend on your mortgage or rent every year. The result might be impressive, or it might just reflect bad budgeting. You might have a neighbour, as I do, with a bigger and better home and a lower monthly outlay. C’est la vie. They bought at a different time.
That’s part of the problem with GDP tracking. It tells us nothing about what we actually get for our money. Two countries can each spend 5 per cent of their GDP on defence and one of them could then field a modern, deployable, well-trained force, ideally tailored to its local circumstances. The other could struggle with ageing equipment, bloated payrolls and pensions, and little capacity to project the global power it sees as its birthright. Context – from economic structure, to cost of living, geography and strategic culture – matters immensely.
A better indicator might be to track defence spending as a proportion of total government expenditure. This would at least show how defence ranks against competing priorities such as healthcare, education and welfare. It reveals political will and societal expectations far more clearly than GDP and doesn’t depend on the overall size of the economy. It frames security not as a detached economic ratio but as a policy choice within the realities of governing.
According to the Institute for Fiscal Studies, the UK spends a little under 5 per cent on defence, 9 per cent on education, 10 per cent working-age benefits,12 per cent on pensions and around 18 per cent on health. Guns versus butter? If we choose butter, let’s at least be honest about it.
A different metric would be per capita defence spending, showing how much each citizen effectively contributes to national security. The government’s own figures for 2024 show that the per capita cost was $1,216 (approximately £900) per annum.
But all of these measures still only track inputs, not outputs, and definitely not outcomes. Capability is the finished product. If you can get what you need by spending less, why wouldn’t you? True accountability should focus on what spending delivers. We shouldn’t celebrate being fleeced in the open market.
Measuring outcomes is difficult, but that doesn’t mean that it can’t be done. Alliances such as Nato could adopt capability-based benchmarks rather than fiscal ones and tailor them to individual members’ strategic contexts and, importantly, the real needs of the alliance.
Actually, they already do.
Nato has action plans in place for defence and deterrence and confidential regional response plans showing what each ally needs to do, and where, in the event of rising tension or conflict. Frontline allies in the Baltic can commit to rapid reaction and air defence, while maritime nations such as the UK safeguard sea lines of communication in the North Atlantic. These commitments don’t prescribe how much countries must spend, but what they must deliver. So why don’t we talk about them more? It could be politically advantageous to everyone. A small, fiercely independent former Soviet bloc ally could proudly meet the Nato ‘joining fee’ and stop at that. The UK, with global ambitions, could brag about meeting its Nato commitments and then some. There would be choice about what to do rather than what to spend.
Defence and security are not free, but they are also not an accounting exercise
The facts and figures are all available, but we ignore them in favour of a political poo trap. Spending benchmarks such as ‘3.5 per cent of GDP’ endure because they are simple numbers and, allegedly, communicable. But simplicity shouldn’t come at the expense of meaning. Imagine if instead of chasing a uniform spending target without context, each ally committed to fulfil a military role. Our national conversations would be very different. It would be true burden sharing. It would be fairer. It would be about outcomes not inputs. Innovation and efficiency would be rewarded.
Ultimately, the public deserves a metric that tells us something real about what our armed forces can actually do. Defence and security are not free, but they are also not an accounting exercise. Or they shouldn’t be. When we next hear our leaders talking percentages, we should be asking deeper questions than what we’re spending by the end of this or that parliament. We should ask what we can do now and what we want to do in the future.
Just as a homeowner’s excessive outlay doesn’t guarantee a better house, higher defence spending doesn’t guarantee better armed forces. We may or may not need more money for defence. But we certainly need better awareness and debate.
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