UK Treasury Lacks Plan for Nato Defense Spending Target

UK Government Uncertain About Funding Path

The UK Treasury has as yet carried out no analysis of the trade-offs necessary for the UK to hit the 3.5% of GDP defence spending promise made to NATO, chief secretary Lucy Rigby has said. Under robust questioning in a joint session of the Treasury and defence select committees on Wednesday, Rigby repeatedly stated that how to fund additional defense spending would be a matter for “the next prime minister.” The failure to set out a future spending path was among the reasons for the dramatic recent resignation of John Healey as defence secretary. Asked if the Treasury had done any number-crunching, Rigby said, “these are decisions for the future government to make.” Treasury select committee chair Meg Hillier reminded her, “you are the chief secretary of Treasury. You’re the one in the government who oversees all public spending.”

Around £30-40bn extra would be needed for defense spending, equivalent to 3p to 4p on all rates of income tax, as per Committee member Bobby Dean’s point. Rigby acknowledged there would have to be a debate about “public consent” for such a change. The government has an interim target of spending 3% on defense in the next parliament, but the path to that figure remains unspecified.

The government’s next spending review is expected in mid-2027 by which time Andy Burnham is expected to be prime minister. “We’ve said for the next parliament, we will get to 3%, and I understand that the question is being asked when in the next parliament,” she said. Rigby repeatedly stressed the difficult decisions in prospect, saying, “it’s not straightforward: money is finite.”

The Fractious Relationship Between Treasury and Ministry of Defence

Rigby and Luke Pollard, who appeared alongside her, were repeatedly asked about the tension between the Treasury and Ministry of Defence. The pair both claimed the two departments are now working better together. However, tensions remain as the government attempts to meet its Nato commitments while navigating internal disagreements. The next spending review may provide some clarity but highlights the challenges ahead as the government balances its commitments with public finances.

Sources: The Guardian, Al Jazeera