I'll cheerfully give you the advantage on the microscopic difference between what you'd like 2.5% of GDP and what you're claiming is paid 2.1% (although the CIA website, which is normally pretty hot on that kind of thing, says 2.4%).
I'd argue that, even if you're right, you are still getting 87.5% of the money you want. Its clear we're not getting 87.5% of the capacity we expect for the money and the microscopic difference isn't the problem. The problem is that the MOD simply wastes cash everywhere. Britain spends more than every other country in world other than the US and we're simply not getting value for money, our armed forces should be significantly better than the other non-US ones in NATO, and lets face it, they aren't.
But you're simply not thinking the implications through. The UK is not growing quickly when compared to the rest of the world. In other words the issue is going to get worse, not better. This is part of the problem with the 1997 Strategic Defence Review - it simply wasn't grounded in economic reality and rapidly raced off to la-la land. To be fair the new government was just in and the MOD hadn't done any thinking about the future.
Lewis merely points out these issues with some style.
Now lets look at these mad spending plans you / the MOD have:
"The Navy needs to order at least eight Astute subs in order to maintain a healthy sub industry that will be able to provide a Vanguard replacement."
So in order to replace some vaguely useful subs in the future, which might carry missiles that the Americans don't control, we must have useless subs now. The current replacement plan is the Astute class, which will cost us the same amount as a half dozen (actually useful) infantry battalions (£1.7bn, around $3.5bn). No one is sure what the mission of the Astute will be, or why we want it. I note in passing that 6,000 people will work, in some way, on Astute - we could pay them each £250k to stay where they are for 5 years (who wants £50k a year to stay home? Any takers? Its 3 times more than an Infantryman earns)and still come out ahead of the deal as we'd never have to pay for operating the Astute-tat when it launches.
More seriously we could as easily by off the shelf American kit at a quarter of the price. By comparison the cost of refitting the ancient American OHIO class came in at less than £600 million quid (around $1.2bn). Hm, lets see... The US can upgrade her old nuclear weapons kit at the cost of 1/10th of our prototypes for a future nuclear weapons submarine. I'm starting to spot a reason that British military procurement has a problem. Can anyone else see it?
That's it in one, like a acne covered teenager with Mums credit card the UK always wants the latest 3G kit. The Yanks on the other hand make do with what they have. The OHIO class was out, and now its back. They do the same in the air, the USAF have just extended the operational life of the B-52 to 2030 - that's 80 years. So they spend a lot more, but they also save more, whilst the MOD just wastes cash.
"The Navy needs eight T45 AAW destroyers."
No, it really doesn't. There is no mission for the Type 45, we simply haven't fought anyone with an air force in decades and, as a nation, have no intention of doing so. Preparing to re-enact the Falkands isn't on the agenda, we haven't got the money. In fact the one thing that might be argued to be a vaguely useful thing they could do would be to carry Tomahawks, but they don't. Each of these useless future-Admiral-creators will likely cost us a billion quid. That's another 2 actual infantry battalions a time. Simply losing these items will allow us the money to add 50% to our infantry strength.
"The Navy needs eight larger ASW destroyers to replace the T23 frigates."
Oh god. Not more useless Anti Submarine Warfare crap. Look we're got the Merlins, at £105m a pop - whole squadrons of the useless things. Never mind the Nimrod Mark 4 deathtrap. By comparison the Iranians have three submarines, which cost about £400m, so we spend £10bn in a whole different string of job-creation strings to stop them; assuming they ever set sail.
Its frankly appalling that anyone should even consider ordering any more ASW stuff for the next decade or two. Look, the only submarine sunk since 1945 was on the surface. Even having so much ASW kit looks a bit dim, unless we're planning to go to war with the US, China or Russia - in which case neutrality is our only sane strategic option.
"The Navy needs eight Global Cruisers able to act independently of the now non-existant flotillas on global duties."
Errrm. Sure. Those "Global Cruisers" (weren't the Future Surface Combatant cruisers laughed out as complete madness in 2004?) are well known for their ability to handle the rivers of Afghanistan. Not really Global, are they? If by "global duties" we mean a sun-drenched jolly down in the Carribean on "anti-drugs patrol" I'm not completely sure that a multi-billion pound warship is the way to do. I think club 18-30 would be cheaper all round.
"The Navy needs eight small multirole warships otherwise defined as C3."
C3? I assume that this stands for Crap-Cubed? Are these even in existence on the drawing board? Why do we need them?
Now if you'd said more Anti Minewarfare ships for use if things went pear-shaped in the Gulf I'd be bang alongside. Maybe some small fast craft for patrolling with proper guns on for the Marines to play with. A half dozen copies of HMS Ocean, absolutely. Lots and lots (and lots) of lovely transport planes and utility helicopters? Darn straight. A few UAV's? OK.
But buying silly things like more Attack subs, or ASW or AAW ships, at silly prices, for no reason is the reason that we're currently stuffed. Getting unstuffed is the way to go.