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Government explores early boost to defence budget
Prime Minister Keir Starmer's team is examining proposals to raise UK defence spending to 3% of GDP before 2029, potentially adding billions to annual costs, sources told the BBC.
Current targets and new pressures
Last year Starmer pledged to allocate 2.5% of GDP to core defence by April 2027. He also set a longer-term ambition of 3% in the next parliament, which could run until 2029. Officials are now assessing whether to bring that 3% goal forward to the current parliament.
The Ministry of Defence reportedly needs an additional £28 billion over the next four years to meet existing commitments. Chief of the Defence Staff Sir Richard Knighton told MPs in January that the current budget would not cover planned programmes at the desired pace.
Costs and Treasury caution
Advancing the 3% target by five years would require significant extra funding. The Office for Budget Responsibility estimated last March that reaching 3% by 2029-30 would cost an extra £17.3 billion annually. The Institute for Fiscal Studies suggested a lower figure of £13-14 billion after accounting for already planned increases.
The Treasury is reportedly wary of the proposal. Sources say discussions are ongoing across government, led by the prime minister, but no final decision has been made. One official noted that the departure of Starmer's former chief of staff, Morgan McSweeney, had shifted the internal dynamic.
Potential funding sources
Whitehall sources indicated that several budgets could be scrutinised for savings, including Overseas Development Assistance, net-zero initiatives, or the High Speed 2 rail project. Borrowing is another option, though the Treasury is reluctant to breach fiscal rules and risk unsettling financial markets. A special MOD group has been formed to explore ways to align spending with fiscal constraints.
International context and political signals
At the Munich Security Conference over the weekend, Starmer argued for faster and larger defence investments to counter threats such as Russia. He framed increased spending as a way to reduce reliance on the United States and strengthen cooperation with European allies in supporting Ukraine.
"To meet the wider threat, it's clear that we are going to have to spend more, faster."
Keir Starmer, Munich Security Conference
Foreign Secretary Yvette Cooper acknowledged the need for further investment, calling the current plan the largest since the Cold War but stressing that more would be required to bolster defence and partnerships.
The United States has privately urged the UK to accelerate its spending plans. One defence source noted that advancing the 3% target would align with NATO's broader commitment to reach 3.5% by 2035.
Next steps
The government's defence investment plan remains under review. A Ministry of Defence spokesperson declined to comment on speculation, stating that the focus is on delivering the largest sustained increase in defence spending since the Cold War, including an extra £5 billion this financial year.
