New money for drones and laser weapons to “revolutionise” Britain’s armed forces has been announced by Rachel Reeves as part of a £2.2bn rise in defence spending.
Vowing to turn the UK into “a defence industrial superpower”, the chancellor used her spring statement to unveil plans aimed at boosting arms exports and reaching a target of spending 2.7% of GDP on the sector by 2027.
Four Royal Navy warships are to get DragonFire laser weaponry that use intense light beams to cut through targets as part of a technological boost. A minimum 10% of the Ministry of Defence’s (MoD) equipment budget will go on novel technologies that include drones and AI-enabled kit.
The boost comes on top of £6.4bn that Keir Starmer had pledged in February would go towards the defence budget by 2027.
Other announcements include plans to create a new quango, the Defence Growth Board, in a move that Reeves said would “maximise the benefits from every pound of taxpayers’ money that we spend” and put defence at the heart of industrial strategy.
UK Export Finance (UKEF), a government agency that is supporting UK businesses with export finance, will also get £2bn to provide loans for overseas buyers of UK defence products.
Arms companies welcoming the statement included the UK subsidiary of Anduril, the US military drone manufacturer backed by the tech billionaire Peter Thiel. The company – which has said it is considering opening a factory in Britain – said in a statement released through the Treasury that the spring statement’s defence plan “echoes our thoughts and our values as we work hand in glove with the government”.
However, the extra defence funding will come at the cost of cuts to the aid budget, and Reeves was accused of “rushing through the cuts” by Bond: the membership body for NGOs. They were surprised the cuts were confirmed to start immediately from the new financial year (2025-26).
Tobias Ellwood, a former minister at the MoD, also said he was concerned that the money was coming at the cost of Britain’s “soft power” capability, adding: “You can’t tackle Ebola with more tanks.” But he gave credit to Reeves, describing the 10% for technology as a “positive start”.
“A defence growth board is a good idea. It’s not in the mindset of military personnel.”
Dr David Blagden, an associate professor of international security and strategy at the University of Exeter, said confirmation that the extra defence funding will also be used to refurbish housing stock used by armed forces and their families was particularly welcome as accommodation problems had become a drag on personnel retention.
Speeding up the introduction of energy weapons into the navy was also promising, he said, as there had often been a “glacial lead time” between the development of new kit and its arrival in the hands of Britain’s post-cold war armed forces.
“But of course, we still need to be realistic that this is a useful bit of extra money that will help to sustain the current programme; it’s not a massive splurge that will allow the services to meaningfully increase their numbers of soldiers, ships or aircraft,” he added.
“I am not going to make any apologies for putting more money in defence,” Reeves told the former Labour leader Jeremy Corbyn after he challenged her to end the two-child benefit cap.
