How the UK’s defence spending compares to the rest of Nato

Nato countries are set to return to Cold War-era defence spending to prepare for the threat of a future conflict with Russia.

European Nato members are holding talks about increasing the alliance’s defence spending target to 3 per cent of GDP from its current level of 2 per cent by 2030, reports have said.

Nato’s Secretary General Mark Rutte said on Thursday that it is time to “shift to a wartime mindset”, urging countries to “turbo-charge” defence spending and production to cope with the looming threat of further Russian aggression and the escalating conflict in the Middle East.

The comments come weeks before US president-elect Donald Trump takes office, who sparked concern after saying he would “encourage” Russia to attack any Nato member that fails to meet spending targets.

Here, The i Paper takes a closer look at how the UK’s defence expenditure compares to its Nato allies and what an increase of target spending to 3 per cent of GDP would mean for the alliance.

How does the UK’s defence spending compare its Nato allies?

Of Nato’s 32 members, 23 will meet the alliance’s defence spending target of 2 per cent of GDP this year – a rise from nine just five years ago.

Poland will spend 4.12 per cent of its GDP on defence this year, surpassing all other Nato countries.

The Polish Foreign Minister Radoslaw Sikorski has pledged that the country will further increase its defence spending to 5 per cent of GDP by 2025 – marking a two-fold increase from its spending in 2022 (2.42 per cent) – in response to Russia’s continuing war against Ukraine.

Estonia – which also borders Russia – spends the second most on defence as a share of its GDP (3.43 per cent), followed by the US (3.38 per cent).

The UK’s defence spending as a share of GDP will be 2.33 per cent this year, placing it 10th behind Latvia (3.15 per cent), Greece (3.08 per cent), Lithuania (2.85 per cent), Finland (2.41 per cent) and Denmark (2.37 per cent).

While the US is the only country to decrease its defence spending as a share of its GDP since 2014, from 3.8 per cent to 3.38 per cent, its expenditure still accounts for two-thirds of Nato’s total in monetary terms, totalling at $967.7bn (£765.9bn).

By contrast, the UK will spend around $82.1bn (£64.6bn) on defence this year – less than one-tenth of US expenditure.

Meanwhile, eight Nato members will fall short of the 2 per cent benchmark agreed a decade ago.

These include Croatia, Portugal, Italy, Canada, Belgium, Luxembourg, Slovenia and Spain.

Could Nato defence spending increase to 3 per cent of GDP by 2030?

Against the backdrop of escalating tensions in the Middle East and Russia’s continuing war against Ukraine, Nato’s Secretary General urged members to increase future spending beyond the current target of 2 per cent, warning that Vladimir Putin intends to “wipe Ukraine off the map”.

“It is time to shift to a war time mindset, and turbo-charge our defence production and defence spending,” Rutte said during a speech in Brussels.

He told the BBC that Trump is “right” in insisting that Nato countries should ramp up defence spending and be less reliant on US expenditure.

Trump said in February he would “encourage” Russia to attack any Nato member that fails to pay its bills as part of the military alliance, sparking backlash from the then-Nato chief Jens Stoltenberg, who said any suggestion that “allies will not defend each other undermines all of our security”.

Amid increasing pressure to boost defence spending, European Nato members are holding talks about setting a short-term target of 2.5 per cent of GDP before increasing it to 3 per cent by 2030, The Financial Times reported, citing three participants in the confidential meetings.

Currently, only five countries spend more than 3 per cent of their GDP on defence. These include Poland, Estonia, the US, Latvia and Greece, with Lithuania falling slightly short at 2.8 per cent.

While Sir Keir Starmer has said the Government has a “cast iron commitment” to increase UK defence spending to 2.5 per cent of GDP from its current rate of 2.33 per cent, foreign policy experts have told The i Paper that a larger increase is needed to reduce Britain’s reliance on the US for security.

Tom Dyson, Professor of International Relations at Royal Holloway, University of London, said: “My view is that European states remain far too heavily reliant on a US security guarantee that has been dissipating for many years. “States in eastern Europe – notably the Polish – have been leading the way in bolstering their defence spending and preparing for the US disengagement from European security which has been under way for some time.

“But Europe’s traditional military powers have had their head in the sand for too long about US disengagement and its implications. And time is not on their side – it will take years to ramp up weapons production, stockpiles and achieve the necessary co-operation in Europe’s defence industrial sector.

“But these challenges also bring opportunities, not least for the UK. US disengagement opens a window for the UK to assume stronger leadership in Nato. But this will require bold leadership from Sir Keir Starmer. A substantial increase in defence spending would not only boost European defence but also – if invested correctly – the UK economy.

“Renewed British leadership in European security would also likely substantially enhance the Labour government’s leverage in its attempts to obtain an improved Brexit deal from the EU, especially on trade.

He added: “The urgency of the challenge – and the strategic and economic opportunities which enhanced defence spending can bring for the UK – means that we should be looking at 3 per cent or above.

“In my view, we should be looking in the next couple of years at reaching Polish levels of defence spending – between 4 per cent and 5 per cent of GDP.”

Edward Arnold, senior research fellow at the Royal United Services Institute think tank, said that the UK will need to increase its defence spending to at least 3.7 per cent of GDP to meet its Nato commitments.

“Broadly speaking, for the UK to properly fulfill all of its Nato commitments, you’d need a sustained increase to the defence budget to around 3.7 per cent.

“So 3 [per cent] is better than 2.5, but still likely insufficient. Otherwise, you can change your Nato commitments or more radically restructure your armed forces, but neither of those options are palatable politically and they are also very difficult to do.”

Mr Arnold said it is “less about the current threat” posed by Russia and the escalating conflict in the Middle East than “about the state of the military, which has not had a sufficient level of funding for several years”.

He added that, primarily since 9/11, the UK has been focusing its attention on warfare through small, “light force structures”, which were needed in operations in Iraq, Afghanistan and the Sahel, rather than larger warfare through a “formed division”.

“Over the last 20 years, they have been doing operations in Iraq and Afghanistan, some in the Sahel, and for those you need light force structures.

“These things take a long time to change and the UK, generally speaking, takes longer to change than other comparable countries.

“It’s been a decade since we withdrew from Afghanistan and nine years since we wanted to fight again on the divisional level of warfare – to be able to fight as a formed division as opposed to something smaller, which is a brigade – and at current projections we won’t be able to form a full division by 2030.

“So you’re talking 15 years to be able to field a network force of around 20,000. That’s very slow.” 

Former defence secretary Ben Wallace also told The i Paper that defence spending must be increased to 3 per cent of GDP for “our Armed Forces to be match fit”.

Warning of “new ways of warfare in Ukraine and resurgent threats in the Middle East”, Wallace said: “If I was the US, I would insist that the membership subscription to entry to the club is 3 per cent by 2030.”

The i Paper understands that the UK Government is only focused on how to reach 2.5 per cent of GDP on defence spending, up from the current 2.3 per cent.

A timeline for this is expected in the spring after the conclusion of Labour’s strategic defence review.