Overall, the amount of money given to the military is actually slightly increasing, but not by much. The UK is at the upper end of OECD countries in terms of military expenditure; but by no means exceptional.
The amount that UK spends allows very successful operations such as Sierra Leone and the Operation Telic (current operations in Southern Iraq) and potential intervention in the Sudan; it also allows the potential to defend overseas territories such as when the Falklands were attacked by a military government. However, it also allowed politicians to decide to take an active role in the in the initial invasion of Iraq and costs 10s of billions of pounds every year that could be spent on other things.
What do people think? Should the UK spend this much, or should we be aiming to be more like Ireland or New Zealand? If we didn't spend so much would we be failing in a moral duty by not being able to maintain peace, or acting more morally by not employing force?
I'm generally of the opinion that democratic intervention under international law is morally correct, we should have done more earlier in Kosovo, we should have done something in Rwanda. The assumptions about the lack of a major threat, and the reliance on the US to cover that risk worry me from an historical perspective, but I can't deny that it looks like that is the situation and that spending money covering a risk that probably won't be realised is wasteful. I appreciate a body which I have some democratic rights within keeping itself as a significant influence in global politics. Overall, I don't think I'm unhappy with the decisions that have been made.