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The UK government is reportedly contemplating a substantial rise in defence expenditure, according to information obtained by the BBC. Officials at Downing Street are exploring the possibility of accelerating the timeline to achieve the current defence spending target, potentially incurring costs running into the billions. This review aims to address growing concerns over defence budgets amid evolving global threats.
At the Munich Security Conference over the weekend, Sir Keir Starmer explicitly expressed the need for quicker and increased defence spending. He stated, “To meet the wider threat, it’s clear that we are going to have to spend more, faster.” The prime minister had earlier pledged to allocate 2.5% of the UK’s gross domestic product (GDP) on core defence by April 2027. Furthermore, there was an aspirational goal set to raise this figure to 3% of GDP during the next parliamentary term.
Recent discussions within the prime minister’s team are considering the feasibility of achieving that 3% spending ambition by the end of the current parliament, which could extend to 2029. No final decision has been reached, as Treasury officials are reportedly cautious about the financial implications. A high-level meeting earlier this month involving the prime minister and his advisers examined how the UK might fulfill its defence commitments within the framework of a long-delayed defence investment plan.
Senior military officials have acknowledged the practical challenges posed by budget constraints. Sir Richard Knighton, chief of the defence staff, told MPs earlier this year that ambitious defence goals could not be met “as quickly as we want to do it, within the context of the budget we have set.” This reality, according to officials, is a key factor prompting consideration of speeding up increased defence spending. While discussions continue, Downing Street sources emphasize that the defence investment plan remains under development and no definitive moves have been made.
Reaching the 3% GDP target significantly ahead of schedule would carry a heavy price tag. The Office for Budget Responsibility estimated last year that boosting defence expenditure to 3% by 2029-30 would require an additional £17.3 billion annually. Alternatively, the Institute for Fiscal Studies’ economist Bee Boileau projected the extra amount needed might be slightly lower, in the range of £13-14 billion, once ongoing spending hikes are incorporated. Currently, the UK spends approximately 2.3% of GDP on defence, about £66 billion annually, with a NATO commitment to reach 3.5% by 2035.
In his remarks at Munich, Sir Keir emphasized that stronger defence spending is necessary to counter threats such as those from Russia. He declared, “We must build our hard power because that is the currency of our age. We must spend more, deliver more, and coordinate more.” The prime minister also highlighted the strategic importance of reducing reliance on the United States by fostering interdependence through greater investments. He added that increased military funding would enhance the UK’s ability to cooperate with European allies in supporting Ukrainian defence efforts.
Inside government circles, there is recognition that the tone of the prime minister’s speech strongly indicated support for raised defence funding, even though no formal announcement followed. Some sources noted the departure of a key adviser known for advocating more defence spending appeared to affect dynamics within the Treasury, which remains cautious. Treasury officials, however, denied resisting any specific 3% budget proposal, underscoring that deliberations on future defence spending are ongoing and government-wide.
Alternatives under consideration to finance the increased defence outlay include reallocating funds from existing budgets such as Overseas Development Assistance, net-zero climate initiatives, or infrastructure projects like the high-speed rail line between London and Birmingham. Borrowing is also an option but is viewed with reluctance due to concerns about breaching fiscal targets and unsettling financial markets. In this context, a special group within the Ministry of Defence has reportedly been tasked with exploring mechanisms to navigate government budgetary rules.
Meeting the 3% spending goal during the current parliamentary term would likely be welcomed by the United States, which has privately encouraged the UK to accelerate its defence investment. A defence insider commented, “Shifting the 3% target left would come as no surprise. The government’s already made this massive commitment along with other NATO allies to get to 3.5% by 2035. The UK has to demonstrate how it is going to get there. That’s what the PM signed up to.”
Foreign Secretary Yvette Cooper acknowledged the government’s promise to deliver the largest increase in defence funding since the Cold War but stressed the need for further steps. She remarked, “We are going to need to go further, of course we will need to go further, because we are going to need to strengthen our defence and our partnerships in order to be able to do so.” Meanwhile, a Ministry of Defence spokesperson declined to comment on speculation but reaffirmed the government’s focus on delivering the “largest sustained increase in defence spending since the Cold War,” including an extra £5 billion this financial year alone
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