Prime Minister sets out biggest sustained increase in defence spending since the Cold War

CHARITIES ‘STUNNED’

• Defence spending to increase to 2.5% of GDP from April 2027, with an ambition to reach 3% in the next parliament.
• Reinvigorated approach to defence industry will drive economic growth and create jobs across the UK, while bolstering national security and protecting borders. 
• Commitment will see the biggest investment in defence spending since the Cold War as the UK enters era of intensifying geopolitical competition and conflict.

As the UK faces a period of profound change, with conflicts overseas undermining security and prosperity at home, the Prime Minister has today (Tuesday 25 February) set out that his commitment to increase spending on defence to 2.5% of GDP from April 2027.  

He has also set an ambition to spend 3% of GDP on defence in the next parliament, as economic and fiscal conditions allow, in order to keep the British people safe and secure for generations to come.

As set out in the Plan for Change, national security is the first duty of the government. In recent years, the world has been reshaped by global instability, including Russian aggression in Ukraine, increasing threats from malign actors, rapid technological change, and the accelerating impacts of climate change. 

The Prime Minister yesterday set out how the UK will be stepping up to meet this generational challenge with a generational response.

The announcement comes the day after the third anniversary of Russia’s barbaric illegal war in Ukraine and shows that the UK will step up and meet this pivotal moment of global instability head-on, with a commitment that will see the biggest sustained increase in defence spending since the Cold War. 

The Prime Minister knows that the working people of Britain have paid the cost of malign actors abroad, whether through increased energy bills, or threats to British interests and values. He is committed to making the country safer, more secure, and increasingly resilient against these interconnected threats. 

Today’s announcement demonstrates the UK’s global leadership in this space. In calls with foreign leaders over the weekend, the Prime Minister reiterated the UK’s commitment to securing a just and enduring peace in Ukraine and the need for Europe to step up for the good of collective European security.

The investment in defence will protect UK citizens from threats at home but will also create a secure and stable environment in which businesses can thrive, supporting the Government’s number one mission to deliver economic growth. 

The increased spending will sustain our globally competitive industry, supporting highly skilled jobs and apprenticeships across the whole of the UK. In 2023-24, defence spending by the UK Government supported over 430,000 jobs across the UK, the equivalent to one in every 60. 

68% of defence spending goes to businesses outside London and the South East, bolstering regional economies from Scotland to the North West.

Through the upcoming Defence Industrial Strategy, this substantial investment will drive R&D and innovation across the UK, including developing technologies such as AI, quantum and space capabilities. 

Prime Minister Keir Starmer said: “It is my first duty as Prime Minister to keep our country safe. In an ever more dangerous world, increasing the resilience of our country so we can protect the British people, resist future shocks and bolster British interests, is vital.

“In my Plan for Change, I pledged to improve the lives of people in every corner of the UK, by growing the economy. By spending more on defence, we will deliver the stability that underpins economic growth, and will unlock prosperity through new jobs, skills and opportunity across the country.

“As we enter this new era for national security, Britain will once again lead the way.”

In addition to our plan to reach 2.5%, the Prime Minister also announced that the definition of defence spending will be updated to recognise what our security and intelligence agencies do to boost our security, as well as our military. This change means that the UK will now spend 2.6% of GDP on defence in 2027.

This shift recognises that the activities of our intelligence increasingly overlap and complement that of our Armed Forces, emphasising the need for total deterrence against the modern hybrid threats we face, from cyber-attacks to sabotage. 

The increase in defence spending will be funded by reducing Overseas Development Assistance (ODA) from 0.5% to 0.3% of GNI and reinvesting it into defence. 

This difficult choice reflects the evolving nature of the threat and the strategic shift required to meet it whilst maintaining economic stability, a core foundation of the Plan for Change. Meeting the fiscal rules is non-negotiable, and the government will take the tough but necessary decisions to ensure they are met. 

The UK remains fully committed to making the world a safer and more prosperous place. In the current geopolitical environment, the Prime Minister is clear that the best way to do that is by deterring and preventing conflict and targeting our aid more effectively.

For example, we have delivered an increase of £113m in humanitarian funding for people in Sudan and those who have fled to neighbouring countries, which will help to reduce migration flows to the UK and help address one of the major humanitarian crises of our era. 

The government remains committed to reverting spending on overseas aid to 0.7% of Gross National Income, when the fiscal conditions allow.

This comes alongside an ongoing review into ODA spend which will ensure that every pound of development assistance is spent in the most impactful way. 

This increase in defence investment will help us build a modern and resilient Armed Forces. It will accelerate the adoption of cutting-edge capabilities that are vital to retain a decisive edge as threats rapidly evolve. Targeted investment will reverse the hollowing out of recent decades and rebuild stockpiles, munitions, and enablers depleted after a period focused on international terrorism and global crises. 

This modernisation will be supported through improved productivity, efficiency, and financial discipline across defence.

The Prime Minister has also committed to publishing a single new national security strategy, bringing together all reviews into one document and reflecting the decisions on resource set out today. This will be published following the Spring Statement next month and ahead of the NATO Summit in June. 

The new commitment on spending comes ahead of Prime Minister’s visit to Washington DC this week, where he will tell President Trump that he wants to see the UK-USA bilateral relationship strengthened and deepened even further, to secure the prosperity and security of both nations for decades to come. 

The government has already significantly increased investment in its national security capabilities, increasing spending on defence by nearly £3 billion in this year alone at the Budget. In addition to growing the defence budget, spending on the Single Intelligence Account was increased by around £340 million between 2023-24 and 2025-26, ensuring that our world-leading intelligence agencies maintain their cutting-edge capabilities. 

Street Child condemns UK Aid Cuts: “You can’t have global security without global development”

Charity founder Tom Dannatt opposes government decision

Street Child strongly opposes the UK Government’s decision to fund increased defence spending at the expense of international aid, warning that the move will have devastating consequences for the world’s most vulnerable children.

“Street Child are horrified that we’re effectively making the world’s very poorest people foot the ENTIRE increase in UK defence spending,” said Tom Dannatt, CEO & Founder of Street Child.

True global security is built on education, self-sufficiency, opportunity, and stability—not through slashing life-changing development aid.

The UK has long played a leadership role in education and development, driving progress and fostering stability alongside global partners.

By stepping back now, rather than stepping up, the government is not only threatening hard-won gains but also retreating from its shared responsibility – weakening vital partnerships and diminishing the impact of past investments.

Right now, 251 million children worldwide are being denied their right to education, including 72 million out of school due to crises such as armed conflict and displacement.

Without urgent action, these children face futures marked by poverty, exploitation, and instability—fuelling the very crises the UK seeks to prevent.

“Investing in international education isn’t charity; it’s a strategic necessity,” continued Tom Dannatt. “A more educated world is a safer, more prosperous world for everyone — including the UK.”

We know that as governments around the world take a step back, the role of the private sector, philanthropists, and other donors becomes even more critical.

Their sustained investment is needed now more than ever to ensure children are safe, in school, and learning. The cost of inaction will be far greater—for the world’s most vulnerable and for global stability.