UK considering significant increase to defence spending
5 hours agoJames LandaleDiplomatic correspondent
PA MediaThe prime minister is considering making a significant increase in defence spending, the BBC has learned.
Downing Street is mulling the idea of meeting an existing spending target earlier than planned at a potential cost of billions of pounds.
Sir Keir Starmer signalled his attitude over the weekend at the Munich Security Conference, telling world leaders: “To meet the wider threat, it’s clear that we are going to have to spend more, faster.”
The prime minister promised last year to spend 2.5% of national wealth – measured as gross domestic product (GDP) – on core defence by April 2027.
But he also set out an “ambition” to increase that spending to 3% of GDP in the next parliament.
The BBC has been told the prime minister’s aides are now looking at proposals to meet that 3% ambition by the end of the current parliament, which could last until 2029.
No decision has been taken and the Treasury is said to be cautious.
The idea was discussed at a key meeting of the prime minister and his advisers earlier this month where they examined how best to meet existing defence commitments as part of the long delayed “defence investment plan”.
Reports last month suggested the Ministry of Defence (MOD) needed an extra £28bn to meet existing costs over the next four years.
Sir Richard Knighton, chief of the defence staff, told MPs in January: “We cannot do everything we would want to do, as quickly as we want to do it, within the context of the budget we have set”.
Officials said this realisation – that previous commitments would not cover rising defence costs and existing bills – was driving the idea of bringing forward the spending plans.
Downing Street sources said the defence investment plan was still being finalised and decisions had not been made. “There is a lot of speculation about,” one said.
Reaching the 3% of GDP target five years earlier than planned would be hugely expensive.
The Office for Budget Responsibility, the independent body that gives ministers economic forecasts, calculated in March last year that increasing defence spending to 3% of GDP would cost by 2029-30 an additional £17.3bn per year.
Bee Boileau, research economist at the Institute for Fiscal Studies, estimated the extra needed would be less, about £13-14bn, once existing spending increases were taken into account.
Last year the UK spent about 2.3% of GDP on defence, around £66bn. The UK – along with all other Nato allies – is also committed to spending 3.5% of GDP on core defence by 2035.
In Munich on Saturday, Sir Keir made a sustained argument for greater defence spending to meet the threat from Russia.
“We must build our hard power because that is the currency of our age,” he said. “We must spend more, deliver more, and coordinate more.”
Greater defence spending, the prime minister argued, would mean less reliance on the United States: “We should deliver generational investments that move us from over-dependence to interdependence.”
It would also, he said, allow the UK to cooperate more with European allies to defend Ukraine.
“To meet the wider threat, it’s clear that we are going to have to spend more, faster,” Sir Keir said. “We’ve shown our collective intent in this regard as well, with the historic agreement to increase spending to 5% on security and defence. And we’re prepared to explore innovative solutions.”
One defence source said the prime minister’s speech read like an argument for increased defence spending with the announcement left out.
Whitehall sources said Morgan McSweeney, Sir Keir’s former chief of staff, was one adviser who had been pushing hard for extra defence spending. But since his resignation last weekend, Treasury concerns were said to have hardened. “The loss of McSweeney has changed the dynamic,” one official said.
Treasury sources said they did not recognise this account, saying there was no specific 3% plan that they were resisting. They said joint conversations taking place about future defence spending which, they insisted, were for the whole of government, led by the prime minister.
But other sources in Whitehall said the Treasury could still be tasked to come up with ways of finding the money.
Getty ImagesThey said budgets that potentially could be raided included Overseas Development Assistance, action to achieve a net-zero economy by 2050; or the high speed rail line between London and Birmingham.
An alternative would be to borrow the money but the Treasury would be reluctant to breach its borrowing targets for fear of spooking the financial markets. One source said a special group had been set up at the MOD to examine ways of getting round the government’s fiscal rules.
Meeting the 3% spending target in this parliament would be hugely welcomed by the United States, which has privately been pushing for the UK to move faster.
One defence source said: “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 told Sunday with Laura Kuenssberg the government had promised the biggest increase in defence investment since the Cold War.
But she accepted the need for more to be done: “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.”
A spokesperson for the MOD said: “We do not comment on speculation. The government is focused on delivering for defence. We are delivering the largest sustained increase in defence spending since the Cold War, with an extra £5bn for defence this financial year alone.”