Nato to pressure UK to spend 3.5 per cent on defence
The UK will have to spend 3.5 per cent of GDP on defence by 2035 as part of a new Nato demand, according to reports, stretching government expenditure far beyond the current 2.5 per cent commitment made by Keir Starmer.
The Labour government has agreed to increase defence spending to 2.5 per cent from 2027, with an “ambition” set to scale up the share of UK GDP to three per cent after the next election in 2035.
But multiple reports have indicated that Nato will force the government to commit to a new target of 3.5 per cent by 2035 at a summit in the Hague later this month.
The summit could also see countries commit to spend 1.5 per cent of GDP on defence-related infrastructure by 2032, The Telegraph reported.
An extra 0.5 per cent to the current ambition set out by Starmer would be equivalent to at least £12.8bn but that figure would rise as the UK economy grows each year.
The commitment would put public finances under extra strain given Chancellor Reeves’ high borrowing levels, costly debt interest payments and small headroom of £9.9bn.
Institute for Fiscal Studies (IFS) director Paul Johnson said extra spending on defence worth dozens of billions of pounds would likely lead to “quite chunky tax increases”.
Ministry of Defence sources told The Times that they had been left “baffled” by Starmer’s most recent spending commitment given the impending Nato agreement.
Defence spending under question
The timing of fresh demands made by Nato may be awkward for the UK government as they come just a day after the strategic defence review (SDR) was published.
It detailed plans to create a new cyber command, munition factories and an expansion of the armed forces.
It also criticised the state of the UK armed forces and said the UK had to ready to defend itself against pathogens and weapons of mass destruction.
The push to invest more in defence comes as the Trump administration has signalled its intention to shift its focus away from defending Europe to its own surrounding areas.
US defence secretary Pete Hegseth has repeatedly called on countries to boost investment in defence.
Secretary-general Mark Rutte agreed Nato’s new spending commitment with Trump officials, it has been reported.