Nato ‘will force Britain to spend 3.5% of GDP on defence'

Times

2 days ago

Britain will be forced to agree to spend 3.5 per cent of national income on defence by 2035 as part of a Nato push to rearm and placate President Trump despite having no plan to pay for it, The Times understands.
Senior figures in the Ministry of Defence have been baffled by Sir Keir Starmer's position on spending — namely to avoid a commitment to spending 3 per cent of GDP on defence in the next parliament.
A senior defence source said Britain would 'without a doubt' have to sign up to a much higher target in three weeks' time at the Nato summit in the Hague.
The new target will be 5 per cent, which will include 3.5 per cent by 2035 on defence and a further 1.5 per cent on military-related needs, such as infrastructure, they said.
The UK would not have a choice, the source said, adding that Mark Rutte, the Nato secretary-general, had already agreed to the new target with the US president.
The new 3.5 per cent target, referred to as The Hague Investment Commitment, is Nato's first since 2014, when allies agreed to a goal of two per cent of national income at a meeting in Wales.
Britain spends 2.3 per cent on defence. However, 0.2 per cent of that goes to spy agencies and other projects that will no longer classify as defence under new Nato rules, it is understood.
This means that, in reality, the UK will have to increase spending from 2.1 per cent to 3.5 per cent in less than a decade if it is to remain a serious player within Nato.
The long-awaited strategic defence (SDR) review, published on Monday, said the UK must have a 'Nato first' defence policy and 'lead' within the alliance.
Professor Malcolm Chalmers, the deputy director general at the Royal United Services Institute, said that meeting 3.5 per cent by 2035 would cost £40 billion a year more than if spending stayed at 2.5 per cent in the same year.
'Income tax currently raises 11 per cent of national income. So this extra 1 per cent for defence could be financed by increasing income tax revenue by 10 per cent,' he said.
Starmer is expected to discuss the Nato target in a meeting this week. Labour is increasing defence spending to 2.5 per cent by April 2027 and has an 'ambition' to reach 3 per cent in the next parliament.
John Healey, the defence secretary, told The Times last week that the government would reach it as a certainty. However, on Sunday he backtracked, clarifying that it was still an 'ambition'.
Starmer said on Monday that he did not believe in 'performative fantasy politics' and defended the government's position, which is not to commit to spending 3 per cent of GDP on defence in the next parliament.
Downing Street insiders also pointed to comments by Starmer in which he appeared to acknowledge the higher target.
The prime minister said in response to a question from Sky News on Monday: 'There are discussions about what the contribution should be going into the Nato conference in two or three weeks' time,' as part of a wider conversation about 'what sort of Nato will be capable of being as effective in the future.'
Speaking to BBC Breakfast on Tuesday, Healey said: 'We will never make commitments to increase funding unless we can show how we are paying for them.'
Senior Labour figures and economists have warned that taxes would have to rise to pay for the increase in defence spending to 3 per cent — and Healey did not rule this out in interview with Times Radio.
General Sir Richard Barrons, a former head of joint forces command and one of the authors of the review, later told Times Radio: 'I would pay more tax if I knew it was going to the military.'
Lord Robertson, the former Nato secretary-general who led the external review team, said 'one alternative' would be to raise taxes to pay for rising defence spending. Another option would be to 'reorder' what the government spends its money on in order to 'prioritise certain areas'. 'Defence is the insurance premium that people in this country pay in order to be safe in the long term,' he told Times Radio.
He also pointed out that some Nato countries were yet to meet the 2 per cent target set out in Wales, adding that Rutte was 'realistic enough to know that he can set targets, he can set ambitions. That is not necessarily what he actually gets'.
Allies are believed to be close to agreeing to a new target of 3.5 per cent on defence by 2035 — two years later than first mooted — before the summit in the Hague this month.
Ministers have been in denial over Trump's wish to dramatically increase Nato defence spending, it is believed inside the MoD, and did not think other major Nato allies such as Germany, Canada and France would sign up to the pledge.
However, one by one, under pressure from the US president, they are all stepping up, it is understood, and some Nato member states have said that even 3.5 per cent by 2032 would not be enough.
Denmark's prime minister warned allies on Monday that a target to boost defence spending by 2032 would come 'too late'.
Asta Skaisgirytė, chief policy adviser to President Nausėda of Lithuania, said on Tuesday that 5 per cent should go towards military spending.
The defence review set out plans to increase the army by 3,000 troops in the next parliament and bolster reserve forces and cadets, as well as spend billions on new weapons such as drones. There was no detail on how many fighter jets the government would buy in future or what a homeland defence force would look like.
General Sir Patrick Sanders, the former head of the army, told Times Radio: 'If you are Putin reading this strategic defence review, what would you be thinking? I would be thinking the government isn't serious yet.' He said he was 'really worried' the government was not acting fast enough on defence.