Retired military chiefs are combining their efforts to press the Government to spend more on the Armed Forces.

The alliance consists of three former chiefs of the Defence Staff and is supported by a grandson of Sir Winston Churchill and Sir Richard Dearlove, who was head of MI6 until three years ago. They want the defence budget increased to relieve the pressure on personnel in Iraq and Afghanistan.

The group is led by General Lord Guthrie of Craigiebank, who was Chief of the Defence Staff from 1997 to 2001 and who previously headed the Army. He said that the lack of funding was having serious repercussions. “Underfunding is having consequences both for our overall defence capabilities and for our Forces at the sharp end, which are too thinly spread and being required to go to war with equipment which is often outdated and not fit for purpose.”

He suggested that funding shortages were behind the surprise resignation this week of Lord Drayson, as Defence Equipment Minister. “I would think that probably he was frustrated by the bureaucracy and that some of his plans for modernising procurement are just not achievable unless more money is available,” Lord Guthrie said.

The third member of the alliance, which was announced yesterday, is Marshal of the Royal Air Force Lord Craig of Radley, Chief of the Defence Staff from 1988 to 1991.

Admiral Lord Boyce, who succeeded Lord Guthrie as Chief of the Defence Staff, retiring in 2003, acknowledged that spending had been increased in the most recent review, but “that goes nowhere near addressing the fundamental issue of proper funding and overcommitment”.

Although it is traditional for retired military chiefs to complain about inadequate defence budgets, this is the first time that they have set up an organisation to push their case.

The UK National Defence Association, founded three days before Remembrance Sunday, wants the current spending of about 2 per cent of gross domestic product to be raised to 3 per cent.

The former MP Winston Churchill said yesterday: “During the Falklands War we were devoting 5 per cent of all we produce as a nation to defence. Today that figure stands at barely 2 per cent, yet we are fighting simultaneously the two most intense wars the UK has been engaged in since Korea. If Parliament continues to call upon its Armed Forces to engage in wars on multiple fronts, defence spending must increase to a minimum of 3 per cent.”

The publicity over the alliance overshadowed an announcement that the Ministry of Defence is next spring to publish a White Paper on improved support for the Forces, their families and veterans. The move follows complaints that members of the Armed Forces are not being cared for properly.

Not long before stepping down as Prime Minister, Tony Blair said he agreed that spending on the Armed Forces should be increased. His speech was seen as a plea to Gordon Brown to increase spending when he took over. Under the most recent spending review for the MoD, announced in July, the budget was increased by only 1.5 per cent in real terms for each of the next three years, and the proportion of GDP stayed at about 2.2 per cent.

The MoD said yesterday that the defence budget was to rise by £7.7 billion by 2011 and that there had been the longest period of sustained growth in spending since the 1980s.

Defence budget

1997-98 £26.9bn

2007-08 £33.4bn

2010-11 £36.9bn

— About 43% spent on equipment each year

— Budget to rise by 1.5%

— Equipment costs rise by 8%

Planned spending on key equipment:

£3.9bn Two aircraft carriers
£10bn 150 Joint Strike Fighters
£21bn 232 Typhoon/Eurofighters
£3.6bn 6 Type 45 destroyers

Source: MoD

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