Chancellor accused of digging in as military leaders demand billions more amid growing global threats.
Rachel Reeves is facing mounting pressure from Britain’s top military brass after refusing to increase defence spending beyond current plans, despite warnings of a potential £28bn shortfall.
The Chancellor has rejected requests from the Ministry of Defence to reopen last year’s spending settlement, amid fears that existing funding will not be enough to meet the Government’s defence commitments over the next four years.
Talks between the Treasury and the MoD have stalled, with senior service chiefs warning that current plans risk leaving Britain underprepared at a time of heightened global instability.
Prime Minister Keir Starmer has pledged to raise defence spending to 2.5 per cent of GDP by April 2027, with an ambition to increase this further to 3 per cent in the next parliament. Reports earlier this week suggested Downing Street was considering accelerating the rise to 3 per cent by 2029, although No 10 later insisted this interpretation was incorrect. It is understood the Treasury has concerns about any suggestion of moving faster.
The Government has yet to set out in detail how the planned uplift will be funded. Defence officials argue that inflationary pressures and overspending on major procurement projects have created a funding gap running into tens of billions of pounds.
Senior figures within the armed forces have repeatedly warned that the UK must rearm more rapidly in light of Russia’s actions in Ukraine and its shifting military posture.
Air Chief Marshal Sir Richard Knighton, Chief of the Defence Staff, said last week that Russia’s stance had “shifted decisively westward” and warned that “hard choices” on public spending would be required.
He is understood to have raised concerns directly with the Prime Minister in a Downing Street meeting before Christmas, outlining a possible £28bn shortfall in the MoD’s long-term plans.
Officials have asked the Chancellor to revisit the funding agreed in last June’s spending review. However, Treasury sources insist there is no additional money available beyond the existing settlement, which is set to reach £73.5bn a year by 2028-29.
The impasse has delayed publication of the long-awaited Defence Investment Plan, which will set out how Britain intends to equip its armed forces over the next decade.
Government sources have indicated that the Treasury is wary of committing further funds without assurances that the MoD can curb waste and improve procurement efficiency. There are also concerns that additional defence spending would require cuts elsewhere or further tax rises in a future Budget.
On Tuesday, Air Chief Marshal Sir Harv Smyth, head of the RAF, acknowledged frustration over delays to the Defence Investment Plan, telling an audience at the Royal Aeronautical Society that the issue was now sitting “at the political level”.
He said service chiefs were working through multiple options for ministers, but added that decisions ultimately lay with politicians.
Sir Richard Knighton also issued a joint call with his German counterpart last week for a “step change in our defence and security”, arguing that Nato’s push for higher spending reflected a new security reality.
In a newspaper article, the pair said Russia’s military build-up and its war in Ukraine demanded “hard choices and prioritisation on public spending”, warning that complacency was not an option.
Similar concerns have been voiced by other senior commanders. In December, General Sir Gwyn Jenkins, the First Sea Lord, warned that Britain must “step up” spending or risk losing control of key maritime routes.
Over the weekend, Sir Keir told Nato allies at a security summit in Munich that Europe needed to accelerate rearmament, saying that to meet the wider threat “we are going to have to spend more, faster”.
Downing Street later denied that the Government was planning to raise defence spending to 3 per cent of GDP before the end of the current parliament, pointing instead to closer cooperation with European allies on defence procurement as a way of stretching existing budgets further.
A Government source said bringing forward the uplift would carry “significant fiscal implications” and that ministers were instead focused on achieving savings within the MoD’s current financial envelope and pursuing joint purchasing arrangements with Nato partners.
The debate comes as Mark Carney, the Canadian prime minister, urged the UK to consider joining a proposed defence, security and resilience bank designed to provide loans for military procurement. Britain has previously ruled out participation, although officials suggested the proposal is now being reconsidered.
A Treasury spokesman said the Chancellor remained committed to national security, highlighting what he described as the biggest sustained increase in defence spending since the Cold War.
A Government spokesman added that the administration was delivering an extra £5bn for defence this year alone, as part of what it called the largest sustained uplift in decades. However, critics argue that Labour’s commitment sits uneasily alongside their willingness to transfer sovereignty of the Chagos Islands in a deal expected to involve billions of pounds of public funds given to Mauritius.
The stand-off underscores the tension at the heart of Government policy, balancing fiscal restraint with mounting calls from military leaders to strengthen Britain’s armed forces in an increasingly volatile world.
Worth reading in full here: https://www.telegraph.co.uk/politics/2026/02/17/reeves-blocking-spending-boost-for-defence/
Image: British soldiers board the C-130 bound for Sudan. Photographer: LPHOT MARK JOHNSON Copyright: UK MOD © Crown copyright
