Spending less than three per cent of GDP on defence in 1935 led to war

Last Wednesday's Budget has made it abundantly clear there is no realistic prospect of a significant increase in defence spending soon.

The £2.9billion allocated to the MoD is a token drop into the ocean of underfunding that goes back to the end of the Cold War.

There was no commitment to raising the budget to at least 2.5 per cent of GDP any time soon.

Without such a commitment defence programmers cannot plan cost effectively.

Lord Robertson, with Defence Secretary John Healey, is now well into his second Strategic Defence Review.

His first in 1997/98 was an excellent piece of policy work but it failed because the Chancellor, Gordon Brown, refused to fund the outcome fully. Even worse, he imposed a three per cent year-on-year efficiency saving which accelerated the hollowing out of our military which is so evident today.

Learning from that experience and the mood music from Rachel Reeves's budget, George Robertson and John Healey now know they must look elsewhere to ensure we play our full part in Nato and European security.

They are looking to our allies for salvation - a Norwegian support ship to supply HMS Prince of Wales in East Asia next year, helicopter and fast jet training outsourced to the US and the cost of submarine development shared with Australia.

Ultimately, a focus on operations by our skilled Special Forces and Rangers is far cheaper than a sustainable warfighting capability.

But what if our allies are not there?

Having failed either to appease or deter a dictator in the 1930s, in 1940 Britain was standing alone. Our allies had been defeated.

Spending less than three per cent of GDP on defence in 1935 led to war. By 1939 we were spending 19 per cent in the rush to rearm and in 1940 - fighting for our lives - it was 46 per cent.

That is the disastrous cost of fighting a war.

How much better to spend three per cent or 3.5 per cent now to deter war.

History must not be allowed to repeat itself.

• General The Lord Dannatt is a former Chief of the General Staff and co-author of Victory to Defeat - The British Army 1918 to 1940.