LONDON — Britain needs to raise defense spending by over £8 billion a year, or U.S. $10.59 billion, to not undermine the military relationship with the U.S. says a report by the parliamentary defence committee.

The report, which looks at the U.K.’s defense relations with the U.S. and NATO, recommends Britain increases the percentage of gross domestic product being allocated to the military first to 2.5 percent and eventually 3 percent if the country is to maintain the military relationship with the U.S. and keep its leading role in NATO.

“The U.K. armed forces and the Treasury benefit from our close relationship with the U.S. However, that will continue to be true only while the U.K. military retains both the capacity and capability to maintain interoperability with the U.S. military and to relieve U.S. burdens. For this to be the case the U.K. armed forces must be funded appropriately,” said the report released June 26.

The lawmakers urged a significant rise in a defense budget which currently just manages to squeeze above the 2 percent of gross domestic product demanded by NATO for defense spending.

“We calculate that raising defence spending to 2.5% of GDP would result in a forecast spend of £50 billion per annum and raising it to 3% of GDP would take this to £60 billion per annum,” said the lawmakers.

The defense budget this year is set at £37 billion with small real term increases expected annually up to 2022.

A rise to 3 percent would see defence spending return to a level — in GDP percentage terms that has not been seen since 1995.

The release of the document comes at a bad time for anyone advocating increases in defense spending here.

Last week Chancellor Philip Hammond, an ex-defense secretary, revealed plans to spend an additional £20 billion a year on health care and made it clear that there was little or nothing left to bolster the finances of other departments, including defense.

Defence Secretary Gavin Williamson has been battling for months to secure additional funding to fill a black hole that the National Audit Office, the government’s financial watchdog, has previously estimated could be anything between £4.8 billion and £20 billion in equipment spending alone over the next decade.

The exact amount depends to some degree on how much the military can save in efficiency improvements and reprioritizing and cutting capabilities and programs.

The headline outcomes of a Minstry of Defence review into the future size and shape of British forces, officially called the Modernising Defence Programme, could come at the NATO summit scheduled for Brussels starting July 11.

Media reports Sunday on the defense funding battle highlighted the seemingly growing rift between Williamson and senior government figures over the issue.

The reports followed strong denials from Prime Minister Theresa May last week that the government here was considering a watering down of Britain’s ‘tier-one’ status as a military power after the Financial Times reported that May asked Williamson to justify continuance of that position.

The U.S, Britain, China, Russia and France are the only nations with a tier one status — which basically means they are able to fight nuclear, conventional and other conflicts around the world.

The committee said military-to-military engagement between the U.K. and the U.S. was one of the linchpins of the bilateral relationship between the two nations.

The report said the U.K. benefits greatly from the width and depth of the U.K.-U.S. defense and security relationship, but such a relationship requires a degree of interoperability that can be sustained only through investment in U.K. armed forces.

The importance of the military relationship between the U.S. and Europe’s leading military power also extends into NATO.

Lawmakers said the relationship is vital to the functioning of NATO while the U.K.’s leading contribution to the alliance helps to sustain the relationship between London and Washington.

Julian Lewis, the Defence Committee chairman, said in a statement:

“Defence spending is an area where a strong message needs to be sent to our allies and adversaries alike. The Government has consistently talked about increasing the U.K.’s commitment to NATO after our departure from the European Union. An increased commitment, in the face of new and intensified threats, means that further investment is essential,” said Lewis.

The warning in the report over the risks to the military relationship between London and Washington follows a similar warning in February by U.S. Defense Secretary James Mattis that Britain had to retain a credible military if the relationship between the two nations was to endure and strengthen.

Williamson said that in financial terms alone the U.K. benefits to the tune of £3 billion a year from the U.K.-U.S. defense relationship.

John Spellar MP, the Defence Committee’s senior Labour Party member and former armed forces minister said the inquiry has “underlined the importance of the U.K.-U.S. relationship in the area of defense and security and emphasizes the benefit which the U.K. receives as a result.”

“We have heard that there are perceptions in the U.S. that the U.K.’s defense capabilities have slipped and that concerns have been raised about the U.K.’s ability to operate independently. We need to challenge this perception and the Modernising Defence Programme is an excellent opportunity to do so,” said Spellar.

Andrew Chuter is the United Kingdom correspondent for Defense News.

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