LONDON — Chancellor of the Exchequer George Osborne has pledged Britain will meet NATO's target of spending 2 percent of national income on defense for the remainder of the decade.
"We are committing today to meet the NATO pledge to spend 2 percent of our national income on defense. Not just this year, but every year of this decade," Osborne said in his budget speech to Parliament on Wednesday. "We will ensure that this commitment is properly measured, because we know that while those commitments don't come cheap, the alternatives are far more costly."
Britain's continuing commitment to the 2 percent figure beyond this year has been in doubt since the new Conservative government refused to give any indication it would maintain the key spending target.
Osborne's comments came in a budget which spelled out government plans to cut £37 billion (US $57.4 billion) from overall spending during the five-year life of the new administration. Some £19 billion of that will be achieved by welfare spending reductions.
The government recently announced it was cutting £500 million from this year's £34.7 billion budget, in part by pushing programs to the right and taking any departmental underspend.
No details have been released on exactly how that 2 percent figure might be achieved, but Defence Secretary Michael Fallon has recently indicated post-conflict aid money might be included in the defense budget.
Some politicians labeled the possible international aid switch as a sleight of hand by the government at the time of the Fallon remarks on the subject.
Military pension payments may also be included in the defense budget for the first time to help push spending above the 2 percent mark. Inclusion of pension payments to meet the 2 percent target is allowable under NATO rules.
The devil might be in the details, but the spending commitment will likely be welcomed by the US administration and Conservative parliamentarians who have been warning for months that falling below the 2 percent target would have damaging effects on Britain's defense capabilities and its standing in NATO.
"Today I commit additional resources to the defense and security of the realm," Osborne said. "We recognize that in the modern world, the threats we face do not distinguish between different Whitehall budgets — and nor should we."
Osborne also said he would "guarantee a real increase in the defense budget every year, and on top of that, create a joint security fund of £1.5 billion a year by the end of the Parliament.
"The services will have to demonstrate they are delivering real efficiency and the strategic defense and security review will allocate the money in the most effective way," he said.
The government has a defense review underway at the moment that is expected to report in the fourth quarter on the way ahead over the next five years on capabilities, programs and other issues.
Publication of the strategic defense and security review will likely follow an announcement of detailed departmental spending plans for the next three years expected in September.
The Conservatives have already made several pledges on military spending, including boosting defense equipment spending by 1 percent in real terms per year until 2020, building four Successor nuclear missile submarines and making no further cuts to regular forces.
Email: achuter@defensenews.com
Andrew Chuter is the United Kingdom correspondent for Defense News.
