The British Government faces embarrassment at a key Nato summit tomorrow after an analysis warned the UK is no longer meeting the alliance's spending target.
Defence Secretary Sir Michael Fallon is due to head to Brussels for a Nato defence ministers' meeting just 24 hours after the International Institute for Strategic Studies (IISS) said Britain was no longer spending 2 per cent of GDP on defence.
The calculations are particularly key as Theresa May promised Donald Trump just last month that she would encourage other European countries to meet the alliance's target – in exchange for his "100 per cent" commitment to Nato.
Sir Michael's meeting would have been a key opportunity for the Government to encourage the spending targets. The warnings that the UK itself is not meeting the target are likely pull the rug out from under the UK's position, however.
The UK was previously one of just five Nato countries to meet the target, but now, along with Poland, it has fallen below the line. Now only the United States, Estonia and Greece meet the spending pledge.
The US president Mr Trump said during his election campaign that the US should consider not coming to the military aid of countries that were not meeting the 2 per cent target.
Its its regular briefing The Military Balance the IISS said the UK was now spending just 1.98 per cent of GDP. This amounts to a £380 million shortfall, they said.
A spokesperson for the Ministry of Defence rejected the figures.
"These figures are wrong: NATO’s own figures clearly show that the UK spends over 2 per cent of its GDP on defence," he said.
"Our defence budget is the biggest in Europe, the second largest in NATO, and it is growing each year as we invest £178 billion in new equipment and the UK steps up globally, with new ships, submarines and aircraft over the next decade."
Nia Griffith, Labour’s shadow Defence Secretary, said the Government had "changed its accounting methods" to "give the illusion of keeping the commitment". She branded the breach "utterly unacceptable".
“This report exposes the Government’s complete and shocking failure to maintain its commitment on defence spending to our Armed Forces and to the country," she said.
“Just weeks after the Prime Minister was lecturing our allies about increasing spending to meet the 2 percent NATO commitment, it is now clear that her Government is unwilling to commit the necessary resources to our nation’s defences.
“As the Defence Select Committee has shown, the MoD was already barely scrapping over the 2 percent mark and had changed its accounting methods to give the illusion of keeping the commitment. To be spending less than 2 percent of GDP on defence is utterly unacceptable, particularly in this time of immense global uncertainty.
“Labour is committed to spending at least 2 percent of our GDP on defence spending, as we consistently did when in government.”