I think there is a clear case for a larger army based on current commitments and likely needs for the next ten years. While the peace process continues there is however still a requirement for some 10,000 troops in NI. Iraq may be scaled down soon (at a risk), but Afganistan will require stabilisation for many years to come.

A general rule of 2.8% or even 3% of GDP for the armed forces might make that possible, but may prove to be excessive in some circumstances. In those years the excess should be put aside into a warchest for times of national emerency. Interest earned on the warchest over and above inflation could be put into military hospitals that offer treatment to civilians in peacetime.

 The NHS seems to have money to waste at present. Billions have been wasted on a nationwide IT project. Billions have been wasted on a poorly negotiated settlement with consultants. Billions are wasted on PFI cash cows disguised as new hospitals. The private sector contributes 1% of GDP to healthcare, the NHS only needs a further 8% of GDP to be the best funded health service in europe. The problem is over-management and mismanagement.

I think that, like giving the Bank of England independence, ringfencing funding takes responsability away from politicians and is therefore a good thing. The less that they can meddle with for political motives the better.