Did you hear Alistair Darling announce that he would be increasing defence spending to look after the armed forces working so hard and risking so much on our behalf?
It's true in nominal terms, it's true in real terms, it doesn't appear to be true in terms of a percentage of GDP. With a huge commitment in Afghanistan and new global threats the share of our GDP we spend on the armed forces is still in decline.
The relevant numbers can be seen in Table 1.3 and Table B3:
2007-08: £32.6 billion / £1,404 billion = 2.32%
2010-11: £36.9 billion / £1,630 billion = 2.26%
In strategic terms we are still trying to increase the size of the Cold War dividend. Unless we expect big efficiency savings this isn't sensible behaviour for a nation with big foreign commitments and underequipped armed forces.