The UK and NATO will likely agree to a Trump-inspired pledge for 5% on defence spending - but watch out for smoke and mirrors

Sky News

2 days ago

The UK and its NATO allies are expected to agree to a Donald Trump-inspired pledge to spend 5% of GDP on defence and related areas at a summit this month - but watch out for the fudge.
The key figure - that is not flaky - is a likely new target to increase funding on defence to 3.5% of GDP by the 2030s, up from 2%.
An extra 1.5% of GDP for defence -related areas is not yet very well defined, which means huge potential for smoke, mirrors and accounting tricks.
Mark Rutte, the head of NATO, has apparently set a timeframe for member states to meet the uplift by 2032, but the UK seems to be wanting expenditure to rise over a 10-year period.
This is what happened in 2014 when David Cameron, as prime minister, hosted the NATO summit in Wales and pushed member states to agree to hit the 2% spending goal by 2024.
The US president is demanding allies go much further now.
2:36
Mr Trump wants and what European allies can deliver.
He knows that unless NATO's 31 other member states step up, there is a chance the American leader will walk away in what would be a catastrophe for the alliance and European security.
But the NATO chief, a former Dutch prime minister, also understands the reality of European politics. His country has yet to even meet the 2% defence spending target.
That seems to be why he has tried to make the increase more palatable by splitting it up. The defence chunk looks very military, while the other bit, less so.
A senior defence source told me the goal to spend 3.5% of GDP on defence will come with a new definition for what can be included in NATO expenditure accounting tables.
The rules are going to be stricter, which means no more padding out the data by adding in money spent on stuff that is not strictly defence.
That will be uncomfortable for the UK Treasury - but a big win for the Ministry of Defence.
9:57
The source said 0.2% of Britain's current GDP defence spend will fall foul of the new rules.
This means, under the new ambition, the UK will actually need to raise core defence spending from 2.1% of GDP to 3.5% (a 1.4% uplift) rather than starting at 2.3%.
As for the 1.5% part on defence-related areas, this neatly enables allies to meet the magic 5% mark demanded by Mr Trump, but without the money all having to go on the military, which would have been a much harder sell to the European public.
The source told me that a definition for what will be included in this bucket has not yet been agreed upon.
Mr Rutte has indicated it can include infrastructure projects such as building roads, railways, airports, and seaports.
They are all things that would be useful to the public in everyday life, but also crucial to mobilise the armed forces at speed in a crisis.
The vagueness of the 1.5% spending goal means perhaps the UK could even lump in the £15bn that Rachel Reeves has said the government will spend on transport projects.