Defence spending to rise by £11 billion to 2.6per cent of GDP over next two years, Rachel Reeves announces

Defence spending will rise by £11 billion to 2.6per cent of GDP over the next two years, the Chancellor announced today. 

Rachel Reeves said Britain will become a ‘defence industrial superpower’ with the extra spending boosting jobs across the UK.

In the face of ‘a new era’ of threats, chiefly Russia, Ms Reeves said there must be ‘a new era for defence and security’.

But she did not say when the target of spending 3per cent of GDP on defence will be achieved. 

She told MPs: ‘Thats why we took the decision to prioritise our defence spending by reducing Overseas Development Aid so that defence spending will now rise to 2.6per cent of GDP by April 2027 including the contribution of our intelligence agencies.

‘That uplift provides funding for the Defence Secretary, with a £11bn increase in defence spending and a £600m uplift for our security and intelligence agencies.

‘That investment will deliver not only security, but also renewal in Aldermaston and Lincoln; Portsmouth and Filton; On the Clyde and in Rosyth. Investment in Scotland. Jobs in Scotland. Defence for the United Kingdom, opposed by the Scottish National Party delivered by Labour.’

Chancellor Rachel Reeves leaves No11 Downing Street ahead of the Spring Statement 

The Strategic Defence Review published last week recommended a greater focus on new technology, including drones and artificial intelligence 

The cash injection is a big boost for the Defence Secretary, John Healey

Ms Reeves said £4.5 billion would be invested in munitions in Glasgow, Glascoed, Stevenage and Radway Green.

Some £6 billion will be spent on upgrading nuclear submarine production in Barrow, Derby and Sheffield.

She added: ‘We will make Britain a defence industrial superpower. With the jobs, the skills and the pride that comes with that.’

Shadow chancellor Sir Mel Stride criticised the Chancellor for not providing a timeline to reach 3per cent.

This is made up of an £11 billion increase in

spending and a £600 million uplift for the security and intelligence agencies.

He said: We will always welcome any additional investment in our Armed Forces and capabilities.

Though I note that nothing was said about when 3per cent will be achieved.

All we heard was that in the intelligence service, spending was to be included in defence spending to flatter the numbers.

We left the party opposite a fully funded plan which they dithered over for a year, but now what we get is the Chancellors own black hole on defence spending, the lack of a timeline on when we will achieve the 3per cent.

Instead, we get a £30bn bill for the Chagos surrender – money which should go to our brave Armed Forces rather than, as is being reported, funding lower taxation in Mauritius.

The uplift comes after the head of Nato, Mark Rutte, warned countries that do not ramp up defence spending should ‘learn to speak Russian’.

On Monday, he said the UKs goals to spend 2.5per cent on defence from April 2027 and then aim to get to 3per cent over the next parliament were not at odds with his own proposed target for the bloc.

He has proposed members of the bloc spend 5per cent of gross domestic product (GDP) on defence as part of a strengthened investment plan for the alliance.

The target would require nations to raise core defence spending to 3.5per cent of GDP, while the remaining 1.5per cent is to be made up of ‘defence-related expenditure’.

Mr Rutte said every country is ‘working in cycles’ and that he was ‘really impressed’ with the UKs plans under the strategic defence review unveiled last week.

The Strategic Defence Review published last week recommended a greater focus on new technology, including drones and artificial intelligence.

The Ministry of Defence announced a £5 billion investment in the ‘kit of the future’.

The funding includes £4 billion for drones and autonomous systems, and an extra £1 billion for lasers to protect British ships and soldiers.

In addition to investment in drones and AI, the Government has announced an additional £1 billion for the development of ‘directed energy weapons’ (DEWs) during the current Parliament.

This includes the DragonFire laser scheduled to be fitted to the Royal Navys Type 45 destroyers from 2027, with a similar system provided for the Army by the end of the decade.

DragonFire and other DEWs are intended to provide a lower-cost form of air defence against targets including drones, costing just £10 per shot compared with the thousands of pounds it costs to fire existing weapons.