Chancellor John Healey has promised to set a firm timetable for Britain's next major increase in defence spending, saying the Government's 2027 Spending Review will establish a clear route towards meeting its NATO commitments.
Healey said the review will set out how the UK intends to reach core defence spending of 3.5% of GDP by 2035 and, crucially, name a target date for reaching the intermediate level of 3%.
The commitment goes further than the Government's existing position, which promises to reach 3% during the next Parliament but does not currently specify a year.
Healey promises 'clear path' on defence
Speaking during the G20 gathering in North Carolina, Healey said the next Spending Review would provide a clear path towards the NATO commitment for 2035.
He also confirmed that the review would set the target date for Britain to reach defence spending of 3% of GDP.
Defence will be central to the Spending Review next year, according to the Chancellor, putting military expenditure at the heart of a major future battle over the public finances.
Government currently promises 3% in next Parliament
The Government's Defence Investment Plan, published in June, commits Britain to spending 2.7% of GDP on core NATO defence from 2027-28 onwards.
It also promises to increase spending to 3% in the next Parliament, with the funding and detailed plans due to be established at the next Spending Review.
Alongside its NATO allies, Britain has committed to reach 3.5% of GDP on core defence by 2035 as part of a wider security commitment.
Until now, however, ministers have not fixed a specific year for the move from 2.7% to 3%.
Major funding decisions still to come
Healey's announcement provides greater clarity over when the Government intends to publish its trajectory, but it does not yet settle the central question of how the additional spending will be financed.
According to figures cited by Reuters from the Office for Budget Responsibility, reaching 3% of GDP by 2030 would require an additional £17.3 billion.
The Government will therefore face substantial choices over taxation, borrowing and spending elsewhere as it seeks to reconcile higher military expenditure with its fiscal rules.
Healey has pledged to stick to the borrowing rules inherited from his predecessor Rachel Reeves, making the funding mechanism for the defence increase particularly politically significant.
Defence Investment Plan already adds £15bn
The Government announced an additional £15 billion for the Defence Investment Plan between 2026-27 and 2029-30.
Official figures say the plan contains £298 billion of defence investment over the next four years and will take core NATO defence spending to 2.7% of GDP from 2027-28.
The Government says it will spend more than £60 billion extra on defence over those four years compared with maintaining the plans set out at Spring Budget 2024.
The investment includes spending on drones and autonomous systems, munitions, future combat aircraft and other measures intended to improve Britain's warfighting readiness.
Healey previously pushed for 3% by 2030
The issue carries particular significance for Healey personally.
Before becoming Chancellor, he served as Defence Secretary and argued that Britain should set 2030 as the target for reaching 3% of GDP.
He resigned from the defence brief in June after failing to secure the funding he believed was required to meet that timetable.
As Chancellor, Healey now occupies the Treasury role responsible for balancing that defence ambition against competing demands across government.
2027 Spending Review becomes key moment
The new commitment means the 2027 Spending Review is set to become the point at which ministers must move beyond the existing promise of reaching 3% in the next Parliament and publish a more precise timetable.
It will also have to explain how Britain intends to move from the 2.7% level funded under current plans towards 3%, and ultimately to the NATO core-defence target of 3.5% by 2035.
The Government has not yet announced the target date for 3%, and Healey's comments should not be interpreted as a renewed commitment to his former 2030 proposal.
What has now been promised is that a date will be set at the next Spending Review, alongside a clear trajectory towards the 2035 commitment.