I know that defence spending is an issue that is of great importance to many local people. 

I am proud that the Government continues to prioritise defence spending; the UK already has one of the largest defence budgets in NATO. Regardless, the Government recognises that the global security context has continued to deteriorate, with growing links between states that pose the greatest challenge to our interests. These actors - working individually or in coordination - can impact our security and prosperity at home, as with the increased energy bills resulting from Putin’s illegal invasion of Ukraine, disruption to global trade caused by the Iranian-backed Houthis in the Red Sea, and the cyber-attacks that often originate in Russia, China, North Korea or Iran and that impact UK citizens and businesses every year.

For this reason, the Prime Minister has pledged that the UK will spend 2.5 per cent of GDP on defence. Starting immediately, the UK will steadily increase investment in defence, reaching 2.5 per cent of GDP in 2030/31. In cash terms, that means the UK will spend £87 billion on defence in 2030-31, a £23 billion increase on what will be spent in 2024/25, with a cumulative additional spend of £75 billion over the next six years. This additional expenditure will secure the UK’s position as the second largest spender in NATO and will make the UK the largest cash spender in the G7, other than the US; I know Ministers will call on our allies to match this new standard on defence spending.

The Government’s plan to increase defence spending to 2.5 per cent of GDP will be funded in full, without any increases in borrowing or debt. This is because the Government’s economic plan for the country is working: with inflation more than halved, the economy growing at a rate that outperformed forecasts; and headline debt due to fall by over four per cent of GDP at the end of the five-year forecast period.

Prior to the Prime Minister’s plan to reach 2.5 per cent of GDP defence spending, the UK Government had already boosted defence spending to over £55 billion a year, for the first time ever, representing the largest increase in defence spending since the Cold War. This increase was enabled by the Multi-Year Settlement for Defence, announced by the Prime Minister during his tenure as Chancellor in 2020 and totalling an extra £24.1 billion in cash terms over four years. This investment has funded a generational modernisation of our Armed Forces. Additionally, the Chancellor also announced £5.5 billion of investment in the UK’s nuclear deterrent, resilience and munitions as part of his Autumn Statement 2022 and Spring Budget 2023. This funding will allow us to grow our nuclear skills programme and support the delivery of AUKUS.

The UK has also committed to reinforce NATO’s New Force Model through our world-leading capabilities in land, air and sea, including almost all our maritime forces, extra Fighter and Bomber Air Squadrons and increasing the number of Land Brigade-sized units.

As well as keeping us safe, the UK’s defence budget supports 400,000 UK jobs (as of 2021/22), the equivalent of one in every 70 UK jobs. Of these, over 200,000 are with industry, where UK defence supports high-quality, high-skilled jobs across all parts of the United Kingdom. I am assured that the Government’s Integrated Procurement Model will continue this crucial engagement with industry, giving companies the strongest possible understanding of what the Government requires when procuring defence equipment. Likewise, I know that, as part of their plan to increase spending to 2.5 per cent of GDP, the Government plans to invest £10 billion over the next decade to grow our domestic UK munitions production pipeline, whilst increasing our stockpiles. This will represent nearly a doubling of our current spending on munitions production and will send a clear demand signal to industry; essential as we move into, as the Defence Secretary stated in his Lancaster House speech, a pre-war world.

The UK's proud record on defence has also built a thriving export industry, adding £11 billion a year to the economy through exports. I am encouraged that the UK continues to have competitive, innovative and world-class defence and security industries, ensured by the Defence and Security Industry Strategy launched in 2021. I am reassured that the strong growth of UK defence exports will continue under the Government’s Integrated Procurement Model, which will prioritise exportability by embedding export teams earlier on in the Ministry of Defence’s acquisition process, so that international export campaigns commence at a far earlier point in the procurement of a product. I understand that Ministers have set a target for the UK to become the largest defence exporter in Europe by 2030.

Following the 2020 Spending Review, the Government allocated £6.6 billion to invest in research and development (R&D) up to 2024/25. This investment built on the UK’s strengths, tapping into our world class research base. However, understanding that our adversaries also continue to invest in their own R&D, the UK Government has committed to ringfencing at least five per cent of the defence budget for R&D from 2025/26 onwards. This funding will primarily focus on dual use technologies, or where there will be significant spill over effects from military to civil R&D. An additional two per cent of the defence budget will support the exploitation of promising science and technology in military capability, helping the Government to ensure that our Armed Forces have the equipment to fight the conflicts of the future.

In order to coordinate this scaled-up investment in R&D, the Government plans to establish a Defence Innovation Agency that will have responsibility for, and executive power over defence innovation and R&D. In particular, the Defence Innovation Agency will have responsibility for scaling up the UK’s investment in drones (for both surveillance and attack), allowing the UK’s Armed Forces to better exploit the low-cost solutions that are increasingly matching or out-performing more sophisticated systems.

The MOD will place a particular emphasis on accelerating the development of technology areas that are already UK strengths and that have proven particularly effective or important on the battlefield in Ukraine.

A significant part of this Government’s mandate is its mission to level up every part of our country. Ministers are clear that this requires a cross-government and cross-society effort. As a significant area of Government expenditure with a large regional footprint, ensuring that the defence industry is driving sustainable and appropriate local growth is an important part of this mission. Indeed, I understand that every single constituency benefits in some way from the £75 billion cumulative additional funding increase to 2030/31, announced this April.

Following the ongoing success of the trilateral partnership between Westmorland and Furness Council, BAE Systems and central Government, the MOD has announced it plans to establish similar defence regional partnerships to both enable the expansion of an area that is crucial to our national defence, whilst strengthening the local economy by encouraging more people to live and work in the area.

Ministers assure me that they are committed to achieving value for money from their investment in defence. Alongside the significant increase in defence spending, boosting the UK’s overall spend to 2.5 per cent of GDP, the MOD is producing a plan, underpinned by clear targets and metrics, to drive delivery through productivity. Ministers assure me that they will work with the UK defence industry to boost its productivity and competitiveness, setting an aspiration to, again, become the largest defence exporter in Europe by 2030.

In addition, the Integrated Procurement Model will tackle waste by promoting a more joined up approach to defence equipment procurement; prioritising requirements at a departmental level whilst also introducing a new strategic alignment and prioritisation process, centrally run through the National Security Council, to better cohere cross-departmental procurement relating to national security and foreign policy, avoiding the duplication of effort between departments. The UK’s Armed Forces, therefore, will receive the equipment they need, whilst delivering value for taxpayer money.