The NATO 2% pledge is a con – but it does set a useful precedent

In his Emergency Budget earlier this year the Chancellor heralded the UK’s ongoing commitment to honour the 2% NATO target of GDP on defence. This was included amongst an array of other very Conservative proposals including the tax triple lock, a reduction in the welfare cap, and challenging targets for efficiency in non-ring-fenced departments.

This was no pasty tax budget, but a confident declaration of the Chancellor’s determination to finish the job.

Except, some claim it was also a bit of a con. The much heralded 2% commitment would now be met by counting expenditure from various other security related pots, and by including MoD pension payments.

These changes may be technically permissible, but are certainly not in the spirit of the NATO definition. Take pensions as an example – these funds make no meaningful contribution to the UKs defence and security aims, or those of our allies. It’s a bit like saying pensions of retired nurses improves health outcomes.

As Spock might say “its 2% Jim, but not as we know it”. Or as Rachel Maskell MP, Shadow Defence Minister stated Stretching definitions to wider defence and security interests does not make our shores safer.”

The response from MoD was suitably dutiful, and No 10 have been at pains to point out that the broadened definition is in-line with NATO guidelines. But the Defence Select Committee is not convinced, and have launched an enquiry into “defence expenditure and the 2% pledge”. Similarly, the debates sponsored by Gerald Howarth MP’s Private Members Bill will further scrutinise the Government’s pledge.

Although it is clear that the Government will now reach its 2% target only through the use of dubious accounting, the commitment is not without merit.

Compared to the significant spending reductions demanded by the Chancellor from non-ring-fenced departments, the MoD will be quietly content.

It also sets a useful example to other NATO members – particularly in Europe – the vast majority of which fall woefully below the 2% target.

Perhaps the greatest benefit of the pledge – or more precisely the approach to meeting the commitment – is the example it sets for the UK’s treatment of Overseas Development Expenditure (ODA).

Despite the significant contribution the MoD makes to global peace and security, and the self-evident contribution this makes to development, with only minor exemptions, expenditure in this area is not classed as ODA, and therefore does not account towards the UK’s development spend.

When, as a Special Adviser in the MoD I raised this issue with my equivalents in DfiD, they towed the line of the civil servants claiming that attempting to renegotiate the OECD definition risked the situation getting worse not better.

With such a defeatist attitude it is no wonder that the laudable commitment by the UK to spend 0.7% of GNI on overseas aid commands only patchy support – particularly when compared against either expenditure on education or health, or in place of tax cuts.

The upcoming CSR and Autumn Statement – the first for a majority Conservative Government in a generation – is a great opportunity to introduce a consistent approach to both metrics, thus valuing the immense contribution the UK makes to global peace, development and security.