Spring statement: defence spending boosted as further disability benefit cuts announced

Posted on 26 March 2025 • Arts and social sciences, Society and politics

Not even six months on from Labour’s first budget, and the world is a much-changed place. Geopolitical tensions and uncertainties, already high last year, have risen further, and with them the cost of the UK’s debt, while economic growth has stalled. As such, Chancellor Rachel Reeves has confronted an array of unpalatable choices – notably cutting disability benefits – to enable her to increase defence spending and stabilise the public finances.

Modest defence spending boost will struggle to reverse years of decline

Jamie Gaskarth, Professor of Foreign Policy and International Relations at the Open University writes in The Conversation: In two months, the UK defence sector has been turned upside down – primarily by Donald Trump. His administration has made implied threats to invade a NATO ally (Denmark), challenged the sovereignty of another (Canada) and pulled support for Ukraine, openly siding with Russia in ceasefire negotiations. There is a real chance the US will draw down its security presence in Europe.

If European countries are to meet the full cost of their own security, this will have to mean a dramatic increase in defence budgets. So far, the UK has redistributed aid money to help fund an increase in defence spending to 2.5% of GDP (from 2.3%) by 2027, with the ambition to raise it to 3% in the next parliament. It has also offered an extra £2 billion to underwrite defence exports. But this is small beer.

As with many areas of public spending, dramatic cuts to the defence budget during the years of austerity (22% in real terms) have meant delays to procurement, crumbling estates and a chronic lack of investment. This will take a substantial uplift to redress. Recent increases under the Conservatives were eaten up by capital costs and inflation.

And while ideas such as the £400 million ringfenced to support innovation in AI and new technology are welcome, these are tiny amounts in the grand scheme of things. The UK is not going to be a “defence industrial superpower” any time soon if budget announcements are this small, and increases so modest.

This is a section of a longer article, the full article can be found on The Conversation

Picture credit: Squirrel_photos from Pixabay