A problem is that the cost of kit has increased faster than the rise in tax income. Plus people in the UK paid a lot more of their income in tax in the 1950'to mid 1980's. The erosion of the tax take and the horror all politicians have to tell people that if they want more (schools, hospitals, armed forces) they have to be paid for is a long and unedifying story. The "Peace Dividend" was heaven sent chance for them to downplay defence and divert the cash to ... other things....
Th current situation is 30 years in the making and we can now see that everything has been stretched, literally, to breaking point