The UK will be forced to agree this month to increase defence spending to 3.5% of national income within a decade as part of a NATO push to rearm and keep the US on side, Sky News understands.
The certainty of a major policy shift means there is bemusement in the Ministry of Defence (MoD) about why Sir Keir Starmer‘s government has tied itself in knots over whether to describe an earlier plan to hit 3% of GDP by the 2030s as an ambition or a commitment, when it is about to change.
The problem is seen as political, with the prime minister needing to balance warfare against welfare – more money for bombs and bullets or for winter fuel payments and childcare.
Image: Prime Minister Sir Keir Starmer during a visit to a military base training Ukrainian troops in April. File pic: PA
Sir Keir is due to hold a discussion to decide on the defence spending target as early as today, it is understood.
As well as a rise in pure defence spending of 3.5% by 2035, he will also likely be forced to commit a further 1.5% of GDP to defence-related areas such as spy agencies and infrastructure. Militaries need roads, railway networks, and airports to deploy at speed.
This would bolster total broader defence spending to 5% – a target Mark Rutte, the head of NATO, wants all allies to sign up to at a major summit in the Netherlands later this month.
It is being referred to as the “Hague investment plan”.
Asked what would happen at the summit, a defence source said: “3.5% without a doubt.”
Yet the prime minister reiterated the 3% ambition when he published a major defence review on Monday that placed “NATO first” at the heart of UK defence policy.
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1:46
What’s in the UK Strategic Defence Review?
The defence source said: “How can you have a defence review that says NATO first” and then be among the last of the alliance’s 32 member states – along with countries like Spain – to back this new goal?
Unlike Madrid, London presents itself as the leading European nation in the alliance.
A British commander is always the deputy supreme allied commander in Europe – the second most senior operational military officer – under an American commander, while the UK’s nuclear weapons are committed to defending the whole of NATO.
Even Germany, which has a track record of weak defence spending despite boasting the largest economy, has recently signalled it plans to move investment towards the 5% level, while Canada, also previously feeble, is making similar noises.
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2:37
Is the UK battle ready?
The source signalled it was inconceivable the UK would not follow suit and said officials across Whitehall understand the spending target will rise to 3.5%.
The source said it would be met by 2035, so three years later than the timeline Mr Rutte has proposed.
Defence spending is currently at 2.3%.
A second defence source said the UK has to commit to this spending target, “or else we can no longer call ourselves a leader within NATO”.
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Sky News’s political editor Beth Rigby challenged the prime minister on the discrepancy between his spending ambitions and those of his allies at a press conference on Monday.
Sir Keir seemed to hint change might be coming.
“Of course, there are discussions about what the contribution should be going into the NATO conference in two or three weeks’ time,” he said.
“But that conference is much more about what sort of NATO will be capable of being as effective in the future as it’s been in the last 80 years. It is a vital conversation that we do need to have, and we are right at the heart of that.”
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New Sky News podcast launches on 10 June – The Wargame simulates an attack by Russia to test UK defences
Mr Rutte, a former Dutch prime minister, said last week he assumes alliance members will agree to a broad defence spending target of 5% of gross domestic product during the summit in The Hague on 24 and 25 June.
NATO can only act if all member states agree.
“Let’s say that this 5%, but I will not say what is the individual breakup, but it will be considerably north of 3% when it comes to the hard spend [on defence], and it will be also a target on defence-related spending,” the secretary general said.
The call for more funding comes at a time when allies are warning of growing threats from Russia, Iran, and North Korea as well as challenges posed by China.
But it also comes as European member states need to make NATO membership seem like a good deal for Donald Trump.
The leaders of all allies will meet in The Hague for the two-day summit.
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The US president has repeatedly criticised other member states for failing to meet a current target of spending 2% of national income on defence and has warned the United States would not come to the aid of any nation that is falling short.
Since returning to the White House, he has called for European countries to allocate 5% of their GDP to defence. This is more than the 3.4% of GDP currently spent by the US.
Mr Rutte is being credited with squaring away a new deal with Mr Trump in a meeting that would see allies increase their defence spending in line with the US president’s wishes.
The NATO chief is due to visit London on Monday, it is understood.
The joy that filled the final weeks of Diogo Jota’s life makes his death even more devastating to comprehend for his family and millions of fans worldwide.
The most illustrious title of his career was won in May, when he paraded through Liverpool with his teammates and the Premier League trophy.
More success came with Portugal as he won the Nations League for a second time alongside Cristiano Ronaldo in June.
And then came the bliss at marrying his childhood love Rute Cardoso, watched by their three children.
Just yesterday Jota posted a video from the ceremony on social media alongside the message “a day we will never forget”.
The happiest of days was remembered before the tragedy that killed Jota and his brother Andre Felipe in northwest Spain.
Image: Diogo Jota and wife Rute. Pic: rutecfcardoso14/Instagram
Brothers – whose careers both developed at their hometown club, Porto – so tragically dying together.
“Football has lost two great men,” Porto president Andre Villas-Boas said, as fans descended on the club’s stadium to mourn.
At Anfield, Liverpool fans are grieving the versatile forward who was so often in the shadow of Mohamed Salah, as he was under Ronaldo at Portugal.
But he knew how to sacrifice stardom to contribute to the squad.
Image: Diogo Jota holds the Premier League trophy with Wataru Endo and teammates. PIc: Reuters
The last of his 65 Liverpool goals was the winner in the Merseyside derby against neighbours Everton in April – helping the club become the record 20-time champions of England.
A Premier League winners’ medal joining those from the FA Cup and League Cup, won by the 28-year-old after he joined the Reds in 2020.
It was Wolverhampton Wanderers who gave Jota a platform to shine in England after he joined from Atletico Madrid.
Promotion was gained to the Premier League in 2018, and they more than just avoided relegation, but secured back-to-back top-seven finishes.
Jota was a reason why.
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0:48
Fans react to Jota death
He was also why Wolves could embark on such a memorable European campaign, and scored two hat-tricks in the run-up to the Europa League quarter-finals in 2020.
“The memories he created will never be forgotten,” Wolves said.
For the football world, the loss of such a talent so young will be hard to comprehend.
And so many are reflecting on the fragility of life as football grieves from Liverpool to Portugal – and beyond.
The father of a grooming victim who was raped by more than 60 men has said she still lives with the “trauma every single day”.
Marlon West, 51, said Scarlett, now 20, was an academic student at a school in Greater Manchester.
She was happy with a good friendship group and enjoyed riding her horse, Jasper.
But her life changed after she was attacked by a gang at a bus station – they started bullying her and she decided it was better to become their friends.
An older female member then started grooming her for rape gangs made up of Muslim men, her father told Sky News.
Image: Scarlett before she was groomed
Mr West said six men were involved in grooming her from the age of 14 but she was raped by more than 60 before the abuse finally stopped shortly before she turned 18.
By then, she was too terrified to leave home.
“Scarlett isn’t a survivor and a lot of these other girls aren’t survivors,” he said. “The reason being is they’re still living with the trauma every day.”
Mr West, an advanced nurse practitioner for mental health services at the NHS, said his daughter was thrown out of school aged 14 and would go missing for weeks at a time.
On one occasion, he tracked her down to a property in Derbyshire, but when he eventually persuaded police to attend, he was told Scarlett was “safe” with the woman who groomed her and “her friends”.
Image: Scarlett enjoyed riding her horse
Mr West said he was “absolutely furious” when police and social services dismissed the abuse as “a lifestyle choice” and was so desperate he put Scarlett into care when she was 15.
“I couldn’t keep her safe,” he said. “It’s the hardest decision of my life.”
But within a week of her returning home, when she had to leave the care system after turning 16, she was going missing again.
Mr West said the female groomer had stayed in contact with Scarlett and “was literally waiting for her” when she came home.
She was then trafficked all over the country, including Bradford, Birmingham and London.
Image: Marlon West and his daughter Scarlett
Mr West said he had to “scream” at police to track her down before they raided a property in Rochdale where she was found along with heroin and crack cocaine.
Scarlett was arrested and released on bail, but wasn’t charged because she was on a Home Office database as being at risk of trafficking, he said.
“Even though that [arrest] was inappropriate, that stopped it because she was terrified of going out of the house, which she still is now to a certain extent.”
Mr West believes the abuse also came to an end because she was getting older and her abusers were no longer interested.
“This is not just about child sexual exploitation but also criminal exploitation – she was doing county lines, she was picking up firearms for them,” he said.
Image: Scarlett and her dad Marlon
Mr West said any child can be at risk of grooming.
“They’re stereotyping a lot of these survivors, that they’re coming from broken homes, or they’re in care,” he said.
“A groomer doesn’t stand outside a school gate and think, ‘I’m not grooming her because her dad’s a doctor or her dad’s a GP’ – they don’t care. Once they target, that’s it.”
Mr West was speaking as a report by police watchdogs revealed Greater Manchester Police has live grooming investigations involving 714 victims and survivors.
The force said it has 1,099 lines of enquiry relating to potential suspects but only 269 who are confirmed.
“I think there’s more – a lot of survivors haven’t come forward. One, because they’re probably still being groomed and secondly because they’re terrified of GMP and how they’ve been treated in the past,” he said.
“It’s higher than it’s ever been. Services such as police and social services are terrified of political correctness.
“The groomers know they can get away with it because there aren’t many arrests and so it’s increased.”
GMP Chief Constable Sir Stephen Watson promised to go after child rapists and paedophiles “relentlessly” after the publication of the report, which was largely positive about the force’s turnaround in tackling the gangs.
But Mr West believes they are “still failing”, although he welcomed the investigation opened into his daughter’s case.
He said he is “hopeful” the national inquiry into grooming gangs by the government last month “will expose a lot of the cover-ups and give accountability” but is worried about the involvement of services such as councils and police forces because of a lack of trust.
A GMP spokesperson said: “We have met with Scarlett and her father and we’re conducting an extensive investigation into their allegations.
“While we understand the impact of their experiences cannot be undone, we aim to ensure that the experience of the GMP of today would be much improved from that of previous years.”
A Tameside Council spokesperson previously said they were legally unable to comment on Scarlett’s case.
But they said: “Where any concerns or issues are raised we work closely with individuals, families and our partners to provide support and resolve, as appropriate.
“Where individuals aren’t satisfied with the services received, we do have a statutory complaints procedure and individuals can ultimately take their complaint to the Local Government & Social Care Ombudsman.”
You’re probably tired by now of hearing all about “black holes”.
It’s one of those phrases trotted out by journalists in an effort to make economic policy sound a little more interesting. And in some senses it’s a massively misleading image.
After all, when people talk about fiscal holes, what they’re really talking about is something rather prosaic: the amount of money it would take for the chancellor not to break her fiscal rules.
Those fiscal rules are not god-given, after all. They were confected by the chancellor herself. Missing them will not really result in Britain sliding into infinite nothingness. Even so, whatever you choose to call the dilemma she’s faced with right now, it’s certainly quite a big deal.
Image: Rachel Reeves speaks at the NHS’s 77th birthday
And understanding this helps provide a little context for the extraordinary events of the past few days, with markets sliding in the wake of Ms Reeves’ teary appearance at Prime Minister’s Questions.
Following that moment, the yield on UK government debt – the rate of interest we’re being charged by international investors – suddenly leapt higher. Granted, the jump was nothing like what we saw in the wake of Liz Truss’s mini-budget. And those yields dropped down after the prime minister backed the chancellor.
UK’s a global outlier
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Even so, they underline one very important bit of context. The UK has become something of an outlier in global debt markets. For years, the yield on our benchmark government bonds was more or less middle of the industrialised-world pack. But since 2022’s drama, it has hovered unnervingly high, above every other G7 nation.
That speaks to a broader issue. Britain might not have the biggest deficit in the G7, or for that matter, the highest national debt. Others (most notably France, and to some extent, too, the US) face even more desperate fiscal dilemmas in the coming years. But markets do still seem nervous about Britain.
Perhaps that’s because of what they (and we) all endured in 2022 – when British gilt markets stepped briefly over the precipice, causing malfunctions all around the financial system (most notably in obscure parts of the pensions investment sector). But it also owes something to the fact that the chancellor’s own fiscal plans are sailing worryingly close to the wind.
Reeves made fiscal rules matter
The main piece of evidence here is the amount of leeway she has left herself against her fiscal rules. As I said at the start, there’s nothing gospel about these rules. But having created them and banged on about them for a long time, even those of us who are a little sceptical about fiscal rules would concede that breaking them is, as they say, not a good look.
Back in spring, the Office for Budget Responsibility thought the chancellor had about £9.9bn in leeway against these rules. But since then, she has u-turned on both the cuts in winter fuel payments and on personal independence payments. That reduces the £9.9bn down to barely more than £3bn.
But the real issue isn’t just these U-turns. It’s something else. The stronger the economy is, the more tax revenues come in and the more her potential headroom against the fiscal rules would be. By the same token, if the economy grows less rapidly than the OBR expected, that would mean less tax revenues and an even bigger deficit.
And if you compare the OBR’s latest forecasts with the current average of forecasts among independent forecasters, or for that matter, the Bank of England, they do look decidedly optimistic. If the OBR is right and everyone else is wrong, then the chancellor “only” has to fill in the hole left by those U-turns. But if the OBR is wrong and everyone else is right, things get considerably more grisly.
Even a small downgrade in the OBR’s expectations for productivity growth – say a 0.1 percentage point drop – would obliterate the remaining headroom and leave the chancellor with a £6bn shortfall against her rule. Anything more than that (and bear in mind, most economists think the OBR is out by more than that) and she could be £10bn or more underwater.
Now, there are plenty of very reasonable points one could make about how silly this all is. It’s silly that so many people treat fiscal rules as tablets of stone. It’s silly that government tax policy from one year to the next seems to hinge on how right or wrong the OBR’s economic forecasts are.
Yet all this stuff, silly as it might all seem, is taken quite seriously by markets right now. They look at the UK, see an outlier, and tend to focus more than usual on black holes. So I’m afraid we’re going to be talking about “black holes” for quite some time to come.