Kemi Badenoch is unveiling a Conservative plan to increase defence spending by around £10 billion a year, with the extra military funding paid for through major reductions and reforms to welfare spending and other government commitments.
The Conservative leader is committing her party to reach 3% of GDP on defence by 2029-30, arguing that the deteriorating international security environment requires Britain to move more quickly to strengthen its Armed Forces.
The package puts direct pressure on Prime Minister Andy Burnham and Chancellor John Healey to explain how the Government intends to finance its own path towards higher NATO defence spending.
Conservatives promise £10bn-a-year defence increase
Badenoch says a future Conservative government would invest an additional £10 billion a year in defence and reach 3% of GDP by the end of the current Parliament.
The Conservatives describe the proposal as the biggest uplift in defence spending in a generation and say national security must take priority over other areas of government expenditure.
The £10 billion figure and the savings used to fund the package are Conservative Party costings and should not be treated as independently verified Treasury forecasts.
Housing benefit reform expected to provide biggest saving
The largest individual saving in the new package would come from housing benefit reform.
The Conservatives estimate that changes in this area could save approximately £4 billion a year, with the money redirected towards defence.
Further detail will be crucial in establishing precisely which claimants would be affected and how the £4 billion estimate has been calculated.
Two-child benefit cap would return
Badenoch is also proposing to restore the two-child benefit cap, which the Conservatives estimate would eventually save around £3.1 billion a year.
The policy restricts support through Universal Credit and tax credits for third and subsequent children, subject to specified exemptions.
Restoring the cap would represent a major reversal of Labour's welfare policy and is likely to become one of the most politically contentious elements of Badenoch's defence-funding plan.
Motability VAT exemption targeted
A further £1 billion is expected to come from ending VAT exemptions associated with Motability vehicles.
The Motability Scheme enables eligible disabled people to exchange qualifying mobility benefits for a vehicle lease.
The Conservatives' proposal would change the tax treatment surrounding vehicles supplied through the scheme, providing another source of revenue for the defence package according to party calculations.
As with the other savings, the £1 billion figure is a Conservative estimate rather than an independently certified saving.
Chagos agreement would be scrapped
Badenoch is also renewing the Conservative commitment to abandon the agreement concerning the Chagos Islands and the future arrangements for the Diego Garcia military base.
The party estimates that cancelling the deal would save approximately £200 million a year.
The Conservatives have consistently opposed the agreement and have made its cancellation a central part of their foreign-policy platform.
Welfare and other savings redirected towards defence
The individual measures form part of a broader Conservative argument that Britain must reprioritise existing public expenditure rather than rely on additional borrowing to fund the military.
The party has previously outlined plans which it says could reduce welfare expenditure by £23 billion, alongside savings elsewhere in government.
Badenoch's new proposal explicitly links some of those spending reductions to defence, making the choice between welfare and military expenditure a central dividing line with the Burnham Government.
Pressure on Burnham and Healey
The announcement follows Prime Minister's Questions, where Burnham faced demands for greater clarity over the Government's defence plans.
Labour Defence Committee chairman Tan Dhesi challenged the Prime Minister over the timetable for reaching 3% of GDP, while Badenoch also pressed Burnham over how additional military spending would be funded.
Burnham insisted there was no problem with the Government's commitment to defence and pointed to Healey's appointment as Chancellor as evidence of his determination to increase spending.
Healey's defence record puts Chancellor under spotlight
Healey's position gives the Conservative attack particular political force.
Before becoming Chancellor, Healey served as Defence Secretary and resigned from that post during Keir Starmer's premiership following a dispute over the level and timetable of defence funding.
He had argued for Britain to move more quickly towards spending 3% of GDP on defence.
Now at the Treasury, Healey is responsible for finding the money required to reconcile defence commitments with the Government's wider spending plans and fiscal rules.
Government already increasing defence expenditure
The Government's existing Defence Investment Plan provides an additional £15 billion between 2026-27 and 2029-30 and sets out £298 billion of defence investment over the four-year period.
From 2027-28, the Government says core NATO defence spending will reach 2.7% of GDP.
Its published plan commits Britain to reach 3% in the next Parliament, with the funding and timetable to be set out at the next Spending Review, while the UK has also committed alongside NATO allies to reach 3.5% of GDP on core defence by 2035.
The Conservatives are seeking to move faster by fixing the 3% target at 2029-30 and identifying specific spending reductions they say would fund it.
A clear political dividing line
Badenoch's plan creates a straightforward political argument ahead of the next Budget and Spending Review: whether Britain should make deeper cuts to welfare and other programmes in order to accelerate defence spending.
Supporters of the Conservative approach will argue that national defence is the first responsibility of government and that the international security environment demands difficult spending choices.
Opponents are likely to challenge both the social consequences of the welfare reductions and whether the savings would materialise at the scale claimed by the Conservatives.
The underlying commitment is nevertheless clear. Badenoch is promising to reach 3% of GDP on defence by 2029-30 and says an additional £10 billion a year can be found by cutting and reprioritising expenditure elsewhere in government.