The 2.3 per cent also includes £ 1.3 billion in support for Ukraine, including donated military equipment, as it fights to defeat the Russian invasion.
Mr Wallace received public support from Foreign Minister Liz Truss, who supported calls for more defense spending during a parliamentary committee appearance.
Ms Truss said: “I agree with the Secretary of Defense’s concerns. We have a real problem in terms of the availability of defense equipment, given the greatly increased security threat in Europe and we need to increase our industrial capacity.
“I have said before that the free world did not spend enough on defense after the Cold War and we are now paying the consequences.”
General Sir Patrick Sanders, the professional head of the British Army, said the cuts were “perverse” and that the UK should be “unequivocally prepared to fight” if Russia invaded NATO territory.
He said: “It would be perverse if the CGS [Chief of the General Staff] pleaded for a reduction in the size of the army as a land war raged in Europe and Putin’s territorial ambitions extended to the rest of the decade and beyond Ukraine. “
Jeremy Hunt, who is widely expected to oppose Mr. Johnson in any Tory leadership competition said spending should account for four percent of GDP.
Mr Johnson denied that the conservative 2019 election manifesto promised that the defense budget would increase by 0.5 per cent above inflation each year would be broken.
But government figures have privately conceded that it is not expected to be hit. It remains unclear how the promise can be met, given current spending levels and the 11 percent inflation expected this year.
Defense ‘lived on a diet of smoke and mirrors’
Despite an initial draft of his speech edited by No. 10, Mr. Wallace used his address at the Royal United Services Institute to make the case for increased defense spending in the wake of the Russian invasion of Ukraine.
Just as governments respond when the NHS has a winter crisis, “so should they when the threat to the security that underlies our way of life increases,” he said.
Mr Wallace added: “Defense has lived too long on a diet of smoke and mirrors, hollowed out formations and fantasy savings, while the threats to states have begun to increase in recent years.
“At the moment, Russia is the most direct and urgent threat to Europe, to our allies and to these shores. I am serious when I say that there is a very real danger that Russia will strike out against the greater Europe. In these days of long-range missiles and stealth, distance is no protection.
“It is now time to indicate that the peace dividend is over and investment must continue to grow before it is too late to address the resurgent threat and the lessons learned in Ukraine. It is time to mobilize, ready to be and be relevant. “
However, the Telegraph may reveal that more explicit criticism of the current NATO and UK commitment to spend two per cent of GDP on defense has also been included.
It is understood that the original concept of the speech included a rule on how the two percent promise was fulfilled in 2014 and that it was time for the next decade to do more
The line was removed after Downing Street intervened Tuesday morning as it had implications for spending. The intervention followed newspaper reports that Mr. Wallace wanted £ 10 billion a year in extra military spending.
Both no. 10 and no. 11 were blinded by suggestions. Mr. Johnson was on the verge of announcing a major increase in defense spending, according to several sources.