UK set to increase defence spending to 2.5% by 2030
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On a visit to Poland yesterday, Prime Minister Rishi Sunak announced the biggest strengthening of the UK’s national defence in a generation, with a fully funded plan to grow the defence budget to 2.5% of GDP by 2030.
Delivering a speech alongside NATO Secretary-General Jens Stoltenberg in Poland, a country at the vanguard of the continent’s defence, the Prime Minister said we are at a turning point in European security and urged allies to step up.
An axis of autocratic states like Russia, Iran and China are increasingly working together to undermine democracies and reshape the world order. They are also investing heavily in their own militaries and in cyber capabilities and in low-cost technology, like the Shahed attack drones Iran fired towards Israel last weekend.
This poses a direct threat to the lives and livelihoods of people in the UK, as well as across Europe and the wider world. The Government has already committed record investment in defence and the UK armed forces are world-leading – but the Prime Minister has said that we must take further action now to deter these growing threats.
With today’s announcement, UK defence spending will increase immediately and then rise steadily to reach £87 billion at the end the decade – hitting 2.5% of GDP by 2030.
The Prime Minister has set out three areas of focus for a bolstered defence budget:
- Firing up the UK defence industrial base: Investing at least an additional £10 billion over the next decade on munitions production, delivering high-quality jobs and investment across the UK and ensuring the country has rapid production capacity and stockpiles of next-generation munitions.
- Modernising our Armed Forces: Radically reforming defence procurement and creating a new Defence Innovation Agency to ensure the UK is at the cutting edge of modern warfare technology, with at least 5% of the defence budget to be committed to R&D.
- Backing Ukraine’s defence: As part of this plan, the UK government will commit an additional £500 million this year for the ammunition, air defence and drones Ukraine needs – the largest-ever single delivery of military equipment to Ukraine’s frontlines and a cast-iron commitment to maintain existing levels of support to Ukraine for as long as it Is needed.
Prime Minister Rishi Sunak said: “In a world that is the most dangerous it has been since the end of the Cold War, we cannot be complacent. As our adversaries align, we must do more to defend our country, our interests and our values.
“That is why today I have announced the biggest strengthening of our national defence for a generation. We will increase defence spending to a new baseline of 2.5% of GDP by 2030 – a plan that delivers an additional £75 billion for defence by the end of the decade and secures our place as by far the largest defence power in Europe.
“Today is a turning point for European security and a landmark moment in the defence of the United Kingdom. It is a generational investment in British security and British prosperity, which makes us safer at home and stronger abroad.”
This is a fully-funded plan to deliver the biggest transformation of the UK's national defence since the Cold War, moving from an aspiration to spend 2.5% by an unspecified date to a costed commitment to do so in 2030.
Defence spending will increase immediately and rise linearly – with a further £500 million for Ukraine this year and overall increase of £3 billion in the next financial year. Today’s announcement will see an additional £75 billion for defence over the next six years, with defence spending expected to reach £87 billion a year in 2030.
This sets a new standard for other major European NATO economies to follow. If all NATO countries committed at least 2.5% of their GDP to defence, the collective budget would increase by more than £140 billion.
Chancellor of the Exchequer Jeremy Hunt said: “It speaks to Britain’s global role that, with an improving economy, we are able to make this commitment to peace and security in Europe. It also sends the clearest possible message to Putin that as other NATO European countries match this commitment, which they will, he will never be able to outspend countries that believe in freedom and democracy.”
Defence Secretary Grant Shapps said: “As I argued in my Lancaster House speech earlier this year, we are living in a much more dangerous world. Between Russia’s invasion of Ukraine, Iran and its proxies seeking to escalate deadly conflict, and China flexing its muscles, there can be no doubt that the era of the peace dividend is clearly over.
“The mounting threats we face mean we must invest in defence if we are to continue to defend our values, freedoms and prosperity.
“Today’s announcement marks the single greatest strengthening of our defence since the Cold War, which will support jobs, boost growth, and strengthen our incredible Armed Forces as a modern fighting force.”
The war in Ukraine has taught us that battlefield success is dependent on the ability to surge defence production and move to ‘always on’ production to replenish key equipment. The UK government will therefore invest a further £10 billion over the next 10 years, most of which will be spent with British industry, to grow the domestic munitions production pipeline and increase stockpiles, setting a clear demand signal for industry through long term multiyear contracts. This represents nearly a doubling of current government spending on munitions production.
The investment will focus on key high-tech capabilities, including air defence missiles and anti-armour munitions, in addition to continued investment in UK-built 155mm artillery ammunition. Defence already supported more than 400,000 jobs in 2021/22 - the equivalent of one in every 70 UK jobs – but today’s announcement will support new high-quality jobs and economic growth across all parts of the UK.
Reforms set out by the Prime Minister yesterday will also ensure investment in the right technologies and getting more for taxpayers’ money when it comes to defence.
A newly created Defence Innovation Agency will manage scaled up investment in R&D, bringing together the fragmented defence innovation landscape into a single responsible organisation. This includes R&D in new weapons systems such as Directed Energy Weapons or Hypersonic Missiles, as well as space capabilities and other emerging technologies. The UK government will invest in areas that deliver advantage on the modern battlefield and better exploit low-cost solutions, like the inexpensive Unmanned Surface Vehicles seen in Ukraine.
The DragonFire laser weapons system, developed by the MoD in collaboration with UK industry partners, demonstrates how technological development can be accelerated into frontline advantage. Backed by £350 million in government funding, DragonFire can fire at any target visible in the air at around £10 a shot and with an accuracy equivalent to hitting a pound coin from a kilometre away – and the weapon is due to be fitted to Royal Navy ships well ahead of schedule in 2027.
As part of efforts to make defence procurement faster, smarter and more joined-up, the new Integrated Procurement Model, launched by the Ministry of Defence in February, will break down individual service silos and bring in checks and balances through a new integrated design authority. The model will see new technologies being used by the armed forces earlier in the process, rather than waiting for a ‘perfect’ product.
Additionally, the Prime Minister has announced plans to reform the Ministry of Defence’s Head Office to operate as a fully functioning strategic headquarters - holding the front line command accountable for delivery, driving better pan-defence prioritisation and ensuring value-for-money, supported by the National Security Council.
