UK weighs accelerating rise to 3% of GDP for defence spending

Downing Street is actively reviewing proposals to accelerate a planned increase in core defence spending so the UK hits 3% of GDP sooner than previously scheduled. Independent modelling suggests the recurring bill to reach that threshold would be of the order of £17.3bn a year on an Office for Budget Responsibility basis, while analysts adjusting for already committed rises put the net extra requirement nearer £13–14bn annually.

The current government baseline remains a pledged rise to 2.5% of GDP by 2027 with an ambition to reach 3% in the next parliament; at present the UK spends roughly 2.3% of GDP (~£66bn) on defence and has added an immediate uplift of about £5bn in the current financial year. Senior military commanders and Defence Ministry officials argue that a faster funding profile is needed both to cover rising running costs and to accelerate delivery of committed procurement programmes.

The deliberations have taken place under a wider alliance backdrop: at this week’s NATO ministerial meeting Washington pressed European partners to convert headline spending increases into tangible, "fightable" capacity — from ready brigades and surge munitions to resilient logistics and stockpiles — rather than rely on US backstops. That diplomatic pressure has sharpened the argument inside Whitehall that any extra UK money must be tightly focused on operational readiness and industrial scaling as well as headline budgets.

Officials acknowledge there are material short-term gaps in the UK’s current plan: some reports in allied fora have flagged an estimated shortfall of roughly £28bn over the next four years against the programmes ministers say they want to deliver, heightening questions about whether an accelerated timetable would primarily buy more capability or merely increase procurement slippage and sustainment pressures.

Options being modelled by a small MoD team include reallocations from areas such as overseas development, parts of the net‑zero transition budget or major infrastructure projects, targeted additional borrowing within existing fiscal limits, and accounting or timing levers inside Defence to protect core procurement. Near‑term operational fixes being discussed in allied meetings — and reflected in Whitehall planning — include prioritising producible systems, directed funding for ammunition and logistics, multinational procurement and joint stockpiling to close near‑term supply shortfalls, and reforms to procurement and industrial policy to speed delivery.

The Treasury is reported to be cautious about any leftward shift in the timetable, mindful of borrowing and market reaction. Politically, momentum has changed somewhat since the departure of a senior adviser who had advocated a faster rise; that has strengthened Treasury reticence, even as technical work on scenarios continues. No final decision has been taken while the Defence Investment Plan is being finalised and ministers balance capability needs against fiscal guardrails and market confidence.

Strategically, moving earlier to 3% would signal greater UK burden‑sharing to NATO and satisfy calls from the US for faster European capacity building; it could also create demand that stabilises domestic defence suppliers and incentivises closer European industrial cooperation. But accelerating the timetable imposes stark trade‑offs: it would require either material offsets to other public programmes, additional borrowing that risks higher debt servicing costs, or sustained accounting workarounds to remain within declared fiscal rules.

• Estimated additional annual cost to reach 3% (OBR basis): £17.3bn
• Adjusted extra annual cost (IFS estimate): £13–14bn
• Estimated shortfall against stated UK programmes over next four years (reported in allied forums): ~£28bn
• Current defence spend baseline: ~2.3% of GDP (~£66bn)
• Short-term uplift this financial year: £5bn