This paper summarises UK defence expenditure (historic, current, and planned), international comparisons of defence expenditure of NATO Allies, and the financial cost of UK military operations.
It provides an overview of how UK defence spending is currently defined (as well as its historical definition), explains the difficulties in comparing defence expenditure internationally, details how NATO defence expenditure is reported (particularly the 2% target), and how the cost of UK military operations is calculated.
THE NATO 2% TARGET EXPLAINED
In 2006, NATO allies set a target to spend 2% of GDP on defence. The introduction of this target was perceived to be an attempt to address the imbalance of contribution between the USA and NATO's European members.
There is no intrinsic significance to the level of 2% - the figure does not represent any type of critical theshold in terms of defence capabilities. The 2% is viewed by many as being politically and symbolically important.
Click here for the full report (12 PDF pages), on the House of Commons website.