Europe slow to see financial reality of a long conflict

Two years and two months after Russia’s invasion of Ukraine started the biggest war in Europe since 1945, Rishi Sunak has said the UK’s own defence industry should be placed “on a war footing”. Speaking on a trip to Poland, he noted that one of the central lessons of the Ukraine conflict was the need for deeper stockpiles and for the arms industry to “replenish them more quickly”.

Ukraine’s leaders will be too polite to point it out, but this has been evident on the battlefield for some time, though Sunak is not the only European leader to take time to grasp the scale of what is required to fight off sustained Russian aggression, the daily bombing of civilians and infrastructure. With US military aid on pause for four months, and only now poised to restart, the combined result is that Russia is gaining ground.

It has shifted its economy on to a war footing, spending 7.5% of GDP on defence. The UK and Europe have been slow to recognise the reality of a long war.

Sunak’s headline announcement was to increase defence spending to 2.5% of GDP by 2030, comfortably above the Nato target of 2%. But the government’s own maths show that while this is an increase, it is less dramatic than it appears. The current level is 2.32%, which includes day-to-day budgets and the £3bn for Ukraine. In today’s money, 2.5% would amount to a spend of £69bn, a real terms increase of just over £5bn.

Sunak is announcing the Conservatives’ fourth policy on spending this parliament, matching a pledge first made by Boris Johnson two years ago that was briefly raised by Liz Truss to 3% of GDP before being ditched by Sunak himself when he first took power.

A likely election of a Labour government may make this commitment academic again, with Keir Starmer saying his party would go to 2.5% “as soon as resources allow”.

Such a yo-yo approach, reflecting the UK’s recent political chaos, does not help industrial planning in an already notoriously profligate industry, or Britain’s allies in need.

Germany, long cautious about militarism, will this year provide €7bn (£6bn) of military aid to Ukraine, far above the UK’s £3bn, including a badly needed Patriot air defence system, of which Britain has none to offer.