Monday, 09 June 2025
Chancellor Rachel Reeves is set to announce how much money each government department will get over the next few years in this week’s Spending Review, on Wednesday 11 June.
Back in February, Sir Keir Starmer agreed to increase defence from 2029. The Prime Minister’s plan is part of a broader strategic review and involves a commitment to "fully fund our increased investment in defence.” The increase is also said to be the "biggest sustained increase in defence spending since the end of the Cold War.”
But will the Spending Review reflect the PM’s continued recent hard stance on defence?
Dr Daniel Lomas, Assistant Professor in the School of Politics and International Relations, and an expert in intelligence and security services, looks at what he thinks may be announced on Wednesday…
The vision
"The Chancellor is going to have to grapple with the defence burden on public finances. Last week's Strategic Defence Review (SDR) committed the UK – as first set out in the 2025 Spring Statement – to increase defence spending from 2.3 per cent of GDP it spent in 2024, to 2.5 per cent by April 2027. The SDR set the "ambition" to increase to 3 per cent by the 2030s, a commitment which Defence Secretary John Healey has said there is "no doubt" the UK would meet.
“The SDR certainly sets out a vision for UK defence and security at a time of growing geopolitical tensions. Many saw it as a good document, and the wider argument – that we need to spend more on defence – was widely accepted.”
Dr Daniel Lomas, Assistant Professor in the School of Politics and International Relations, and an expert in intelligence and security services
Difficult choices may lead to shortfalls
“But the real issue facing the government is how far and fast it needs to go to meet these targets. Reviews, I'd argue, are only good if they're manageable and attainable. Otherwise, it's just noise. And plenty of commentators have already been sceptical about the potential shortfall between what the SDR says Britain needs and the money promised for defence.
“And let's not forget that defence (having been underfunded) has been ringfenced for increased money, whereas other areas – the international aid budget being one example - have been cut to free up money, and there are parts of the public service where savings have to come from, which may seem politically unacceptable to some on the Chancellor's own backbenches.”
The elephant(s) in the room
“The other issue is what former Prime Minister Harold Macmillan referred to as “Events, dear boy, events.” It might be the case that the UK is forced to spend more than 2.7 per cent of GDP on defence before 2027. The SDR commits the UK to a NATO-first approach – and that's welcome, reducing other wider commitments to focus on threats nearer to home – but the UK is stuck between two unpredictable issues. On the one hand, we've seen that the US government is pushing for NATO members to spend as much as 5 per cent of GDP on defence. The Alliance has responded by talking about a ceiling of 3.5 per cent.
“In other words, the UK's slow increase to 2.5 per cent by 2025 may be overtaken by events, and the Chancellor forced to find more money sooner than later. The other elephant in the room remains Russia. With questions over US support for Ukraine and the NATO Alliance, Europe is needed to stand up in support of Ukraine and deter Russia – and the UK plays a key role in that. Whilst bogged down in Ukraine, Russia's military remains a potent threat, and how that develops will shape the pace of defence spending – a potential headache for the Chancellor.”
Story credits
More information is available from Dr Dan Lomas, School of Politics and International Relations, via daniel.lomas@nottingham.ac.uk
Notes to editors:
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