The UK will increase defence spending to 3% of gross domestic product by 2030 and to 3.5% by 2035, the chancellor, John Healey, has announced. The commitment comes as defence secretary Wes Streeting warned of mounting threats to the country and said his department had already begun raising spending in response. Healey has asked Whitehall departments to find 1% cuts in their budgets for long-term investment to help fund the defence spending increase. He also said he was now fully funding the defence investment plan, which had been a flashpoint in the previous government.
Streeting told the Times that value for money and modernisation must be balanced to ready the UK to "fight the wars ahead". He stressed that deterrence was the core job and that the UK should be able to defeat adversaries if deterrence failed. "Spending more money badly is not virtuous," he said, adding that any additional spending must be done carefully. The NATO secretary general, Mark Rutte, responded to Healey's announcement by saying the UK was on "a credible path towards meeting the commitment made by all NATO allies in The Hague".
Streeting has previously urged all Britons to prepare for potential emergencies by stockpiling supplies. He told the Times he began stockpiling food and water weeks ago, setting aside items including baked beans, sweetcorn, red kidney beans, tuna, protein bars and nuts, alongside bottled water, a first aid kit and a battery-powered torch. He said he was doing so to "lead by example" and encouraged people to think about "household resilience". His mother reportedly contacted him asking how much she should budget to buy as payday approached.
The higher defence spending targets represent a significant shift in government policy. Healey, who served as defence secretary under the previous administration, had resigned from that role in June over what he described as inadequate defence funding. In his resignation letter, he accused his predecessor and the then-chancellor Rachel Reeves of putting the country's security at risk and said he could not accept a defence investment plan settlement that did not give forces the resources they needed. Healey announced his first budget on Wednesday but left details of how the spending targets will be reached until next year's spending review. Streeting also told the Times that the courts were conducting what he called an "active campaign" to "smear the reputation and integrity" of special forces.
For savers and investors, higher defence spending funded partly through departmental cuts could affect public services and borrowing costs, while businesses may face increased tax pressures to fund the commitment.