How much does the UK really spend on defence?

Liam Fox says that we have the fourth largest military budget in the world. Is he right?

If you cut through the military jargon, this morning’s report from the defence select committee is remarkably hard hitting. The committee warns that the government’s cuts mean the armed forces may be falling below the “minimum utility” required to carry out existing commitments, let alone future ones. Unusually, it also criticises David Cameron directly, stating that “The Prime Minister’s view that the UK currently has a full spectrum defence capability is rejected by the committee, as it was by the Single Service Chiefs.”

Liam Fox has responded by emphasising that the UK retains the “fourth largest military budget” in the world. But how accurate is this claim? It’s true, in cash terms at least, that we’re still one of the biggest spenders. In fact, according to the latest figures from the Stockholm International Peace Research Institute (the global authority on defence spending), we’re now in third place. Below is the top ten.

Military Spending: the top ten

2010 (US$, at 2010 prices and exchange rates)

1. USA $698bn

2. China $119bn

3. UK $59.6bn

4. France $59.3bn

5. Russia $58.7bn

6. Japan $54.5bn

7. Saudi Arabia $45.2bn

8. Germany $45.2bn

9. India $41.3bn

10. Italy $37bn

Source: SIPRI

But this is a poor measure of a country’s commitment to defence spending. A clearer picture emerges if we look at military spending as a share of GDP. Here, in graph form, is the top ten (plus the UK).

The data, again provided by the Stockholm International Peace Research Institute, comes with several caveats. The figure for Saudi Arabia, for instance (11.2 per cent), also includes spending on what is euphemistically described as “public order and safety”. The figure for Israel (6.3 per cent) does not include the $2.9bn that the country received in military aid from the US in 2010. But it still offers a much more accurate picture – the UK does not even make the top 30.

This said, even after the government has cut defence spending by 7.8 per cent in real terms, the UK will still meet the informal Nato commitment to spend at least 2 per cent of GDP on defence, one of just five members – the others are the US, France, Greece and Albania – that does. With this in mind, it’s hard to argue that the defence cuts are excessive (although the typically contrarian Simon Jenkins has suggested that they are far, far too small). What is now needed is a clearer alignment between commitments and resources.