By Ashley Kirk and Ben Farmer, Defence Correspondent

Telegraph Online – 24 December 2017

Britain's defence spending has been falling for decades. Since the end of the Cold War, spending has fallen from 3.8 per cent of GDP, to just 2.2 per cent. At the same time, we've decided to focus our efforts elsewhere – with expenditure on health almost doubling as a proportion of GDP over the same period.

The same can be said for international aid, which has seen expenditure double since the end of the 1990s, according to data highlighted by the House of Commons Defence Committee. Between 1988 and 2013, defence expenditure almost halved as a proportion of GDP, despite new and old risks still threatening the country.

Growing threats from terrorism and states such as Russia and North Korea has prompted people to call for increases in defence spending, including former Defence Secretary Michael Fallon.

Welfare spending is now nearly six times defence spending, while health is nearly four times as high and education is more than twice as high. In the mid-1980s, health and education spending were at similar levels to defence spending.

Julian Lewis MP, chair of the Commons Defence Committee said: 

"Quite apart from the figures on our graph, it's worth remembering that in 1995 to 1996, several years after we took the 'peace dividend' at the end of the Cold War, we were not spending the bare Nato minimum of two per cent of GDP on defence, we were spending three per cent of GDP.

"That's the sort of priority we need to defend ourselves properly."

While the general trend for defence spending as a proportion of national income is falling, the total amount spent in real terms does fluctuate. Data from the IFS  reveals that military campaigns such as the Falklands and Iraq wars, as well as long-standing tensions such as those seen during the Cold War, can provoke the UK Government into putting more cash into the Ministry of Defence.

Still, even in a real terms basis, defence spending started to fall again after 2010–11, as the UK started to withdraw from Iraq and Afghanistan and spending cuts started to bite. Despite the fall in defence spending that successive UK Governments have overseen, the UK is still one of the few European countries to match NATO's target of spending two per cent of GDP on defence.

In 2013-14, the UK's defence spending stood at 2.2 per cent, and the Government has committed to the NATO target for the foreseeable future. However, despite meeting the NATO target, military figures describe such a level as a minimum and urge the Government to do more.

Then-Defence Secretary Michael Fallon previously told Sky News : 

"The two per cent is a minimum commitment by Nato members. We meet it at the moment. We have also committed to increasing the budget ahead of inflation each year. But we are reviewing now the threats to our country, which have intensified in the last couple of years. So we do need to be sure that we have the resources that we need and we should aim to do better."