UK defence spending to rise to 2.5% of GDP by 2027 – as Starmer hits out at ‘tyrant’ Putin
Defence spending in the UK will increase to 2.5% of GDP by 2027 while the foreign aid budget will be cut, Sir Keir Starmer has said ahead of a meeting with Donald Trump.
Spending would be raised from the current 2.3%, with £13.4bn more on defence each year after 2027, the prime announced in an unexpected statement in parliament.
Sir Keir said he wants defence spending to increase to 3% of GDP in the next parliament, but that would rely on Labour winning the next general election, set for 2029.
Politics latest: PM fast-tracks defence spending boost by cutting foreign aid
The number is much lower than the US president has demanded NATO members spend on defence, with Mr Trump saying they should all be spending 5% – an amount last seen during the Cold War.
Sir Keir also announced the government would cut back on foreign aid to fund the increase, reducing current spending from 0.5% of GDP to 0.3%.
Moments before the announcement, the Foreign Office said it was pausing some aid to Rwanda due to its role in the conflict in neighbouring Congo.
British Army soldiers from the 12th Armoured Brigade Combat Team during NATO exercises in May last year. Pic: Reuters
Foreign secretary David Lammy just two weeks ago criticised Mr Trump’s decision to freeze USAID, saying development remains a “very important soft power tool” and is worried without it, he “would be very worried China and others step into that gap”.
Sir Keir said the reduction in foreign aid is “not a renouncement I’m happy to make”, as charities said the cuts would mean more people in the poorest parts of the world would die.
He reiterated the government’s commitment to NATO, which he described as the “bedrock of our security”, and criticised Russian President Vladimir Putin, saying “tyrants only respond to strength”.
Addressing his upcoming visit to the White House to meet Mr Trump, the prime minister said he wants the UK’s relationship with the US to go from “strength to strength”.
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You won’t see more tanks – the money is likely to go on cyber warfare
Our defence budget should hit £67.6bn by 2025/26 then another £13.4bn onto that – that takes you to just over £80bn.
My guess is it won’t be spent on the heavy metal, it won’t be lots more tanks, not lots more aircraft or ships.
A lot of it will go, I think, into personnel which are the key elements and the thing we’ve seen degraded and degraded.
So, a lot of the money, I think, will go into transformational warfare, into cyber, into computing, into quantum computing, into being able to create what’s called a kill chain and a kill net, whereby you can see a threat, deal with it immediately, understand what it is immediately, and bring in exactly the right weapon to do something about it.
Even the United States, which is the most sophisticated in the world, you know, is constantly chasing that sort of, Philosopher’s Stone, of the kill.
The Russians aren’t very good at it at all. The Chinese, we don’t know how good they are.
We’re not really certain. But we’ve got to get much, much better at doing that.
So, I suspect a lot of this money will go on things that you won’t see immediately.
But I’m pretty sure also that this sort of money is fundamental to the sort of transformations which I suspect the defence review is going to talk about.
Conservative leader Kemi Badenoch welcomed the defence spending increase and said she had written to him over the weekend to suggest how he could redirect money from the overseas development budget.
“This is absolutely right,” she told the Commons.
“And I look forward to him taking up my other suggestion of looking at what we can do on welfare.”
She urged him to not increase taxes further or to borrow more to fund the rise, but to ensure the economy grows to support it.
Former Conservative defence secretary Ben Wallace said an extra 0.2% was “a staggering desertion of leadership”.
“Tone deaf to dangers of the world and demands of the United States,” he wrote on X.
“Such a weak commitment to our security and nation puts us all at risk.”
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‘Is US a threat to UK interests?’ Sky asks Badenoch
Labour MP Sarah Champion, chair of the international development committee, said cutting the foreign aid budget is “deeply shortsighted and doesn’t make anyone safer”.
“The deep irony is that development money can prevent wars and is used to patch up the consequences of them, cutting this support is counterproductive and I urge the government to rethink,” she wrote on X.
Charities condemned the cut, with ActionAid saying cutting the aid budget to fund the military “only adds insult to injury” and “flies in the face of UN charters”, adding it was a “political choice with devastating consequences”.
Christine Allen, CEO of CAFOD (Catholic Agency for Overseas Development), said the cut means “in some of the most vulnerable places on earth, more people will die and many more will lose their livelihoods”.
She said the cut, coming just after the US froze its aid programme, “is another lifeline being pulled away from those in desperate need”.
Labour promised in their manifesto to increase defence spending to 2.5% of GDP from the current 2.3%, however, ministers had previously refused to set out a timeline.
They had insisted a “path” to get to 2.5% would be set out after a defence spending review is published this spring.
The last blast furnaces left operating in Britain could see their fate sealed within days, after their Chinese owners took the decision to cut off the crucial supply of ingredients keeping them running.
Jingye, the owner of British Steel in Scunthorpe, has, according to union representatives, cancelled future orders for the iron ore, coal and other raw materials needed to keep the furnaces running.
The upshot is that they may have to close next month – even sooner than the earliest date suggested for its closure.
Read more: Thousands of jobs at risk as British Steel consults unions over closure
The fate of the blast furnaces – the last two domestic sources of virgin steel, made from iron ore rather than recycled – is likely to be determined in a matter of days, with the Department for Business and Trade now actively pondering nationalisation.
The upshot is that even as Britain contends with a trade war across the Atlantic, it is now working against the clock to secure the future of steelmaking at Scunthorpe.
The talks between the government and Jingye broke down last week after the Chinese company, which bought British Steel out of receivership in 2020, rejected a £500m offer of public money to replace the existing furnaces with electric arc furnaces.
The sum is the same one it offered to Tata Steel, which has shut down the other remaining UK blast furnaces in Port Talbot and is planning to build electric furnaces – which have far lower carbon emissions.
These steel workers could soon be out of work
However, the owners argue that the amount is too little to justify extra investment at Scunthorpe, and said last week they were now consulting on the date of shutting both the blast furnaces and the attached steelworks.
Since British Steel is the main provider of steel rails to Network Rail – as well as other construction steels available from only a few sites in the world – the closure would leave the UK more reliant on imports for critical infrastructure sites.
However, since the site belongs to its Chinese owners, a decision to nationalise the site would involve radical steps government officials are wary of taking.
They also fear leaving taxpayers exposed to a potentially loss-making business for the long run.
The dilemma has been heightened by the sharp turn in geopolitical sentiment following Donald Trump’s return to the White House.
The incipient trade war and threatened cut in American support to Europe have sparked fresh calls for countries to act urgently to secure their own supplies of critical materials, especially those used for defence and infrastructure.
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Gareth Stace, head of UK Steel, the industry lobby group, said: “Talks seem to have broken down between government and British Steel.
“My advice to government is: please, Jonathan Reynolds, Business Secretary, get back round that negotiating table, thrash out a deal, and if a deal can’t be found in the next few days, then I fear for the very future of the sector, but also here for Scunthorpe steelworks.”
British Steel declined to comment.
UK
Prince Andrew’s Pitch@Palace branded ‘crude attempt to enrich himself’ as Chinese spy documents set to be released
Prince Andrew’s efforts to make money from his Pitch@Palace project have been branded as a “crude attempt to enrich himself” at the expense of “unsuspecting tech founders”, as new documents may shed more light on what he and his team have been attempting to sell.
Today is the deadline for documents to be released relating to Prince Andrew‘s former senior adviser Dominic Hampshire and his interactions with the alleged Chinese spy Yang Tengbo.
In February, an immigration tribunal heard how the intelligence services had contacted Mr Hampshire about Mr Yang back in 2022. Mr Yang helped set up Pitch@Palace China, a branch of the duke’s scheme to help young entrepreneurs.
The alleged Chinese spy, Yang Tengbo, has links with Prince Andrew
Yang Tengbo. Pic: Pitch@Palace
Judges banned Mr Yang from the UK, saying his association with a senior royal had made Prince Andrew “vulnerable” and posed a threat to national security. Mr Yang challenged that decision at the Special Immigration Appeals Commission (SIAC).
Since that hearing, media organisations have applied for certain documents relating to the case and Mr Hampshire’s support for Mr Yang to be made public. SIAC agreed to release some information of public interest. It is hoped they may include more details on deals that he was trying to do on behalf of Prince Andrew.
So what do we know about potential deals for Pitch@Palace so far?
In February, Sky News confirmed that palace officials had a meeting last summer with tech funding company StartupBootcamp to discuss a potential tie-up between them and Prince Andrew relating to his Pitch@Palace project.
The palace wasn’t involved in the fine details of a deal but wanted guarantees to make sure it wouldn’t impact the Royal Family in the future. Sky News understands from one source that the price being discussed for Pitch was around £750,000 – there are, however, reports that a deal may have stalled.
Photos we found on the Chinese Chamber of Commerce website show an event held in Asia between StartupBootcamp and Innovate Global, believed to be an offshoot of Pitch.
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Who is alleged Chinese spy, Yang Tengbo?
Documents, released in relation to the investigations into Mr Tengbo, have also shown how much the duke has always seen Pitch as a way of potentially making money. One document from 21 August 2021 clearly states “the duke needed money at the time, and saw the relationships with China through Pitch as one possible source of funding”.
But Prince Andrew’s apparent intention to use Pitch to make money has led to concerns about whether he is unfairly using the contacts and information he gained when he was a working royal.
Norman Baker, former MP and author of books on royal finances, believes it is “a crude attempt to enrich himself” and goes against what the tech entrepreneurs thought they were signing up for.
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He told Sky News: “The data given by these business people was given on the basis it was an official operation and not something for Prince Andrew, and so in my view, Prince Andrew had no right legally or morally to take the data which has been collected, a huge amount of data, and sell it…
“And quite clearly if you’re going to sell it off to StartupBootcamp, that is not what people had in mind. The entrepreneurs who joined Pitch@Palace did not do so to enrich Prince Andrew,” he said.
Rich Wilson was one tech entrepreneur who was approached at the start of Pitch@Palace to sign up, but he stepped away when he spotted a clause in the contract saying they’d be entitled to 2% equity in any funding he secured.
He feels Prince Andrew is continuing to use those he made a show of supporting.
He said: “It makes me feel sick. I think it’s terrible – that he is continuing to exploit unsuspecting tech founders in this way. A lot of them, I’m quite grey and old in the tooth now, I saw it coming, but clearly most didn’t. And a lot of them were quite young.
“It’ll be their first venture and you’re learning on the trot, so to speak. So to take advantage of people in such a major way – that’s an awful, sickening thing to do.”
We approached StartupBootcamp who said they had no comment to make, and the Duke of York’s office did not respond.
With reports that a deal may have stalled, it could be a big setback for the duke – especially with questions still about how he’ll continue to pay for his home on the Windsor estate now that the King no longer gives him financial support.
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