Increased defence spending will boost UK economic growth, Streeting says
Wes Streeting, the new defence secretary, has said increased defence spending will make "an enormous contribution" to UK economic growth, signalling that the military will be prioritised over other government departments under Andy Burnham's leadership. Speaking at the Farnborough airshow, Streeting made no new financial commitments but pledged to give the arms industry "clarity and confidence", seeking to draw a line under the disputes over defence funding that contributed to Keir Starmer's downfall. He also warned that higher defence spending would carry an "opportunity cost across government", meaning the Ministry of Defence must demonstrate it is using existing resources wisely.
Burnham has recommitted the UK to raising defence spending from 2.6% to the Nato target of 3.5% of GDP by 2035, a real-terms increase of more than £25bn within a decade, a level not seen since the early 1990s. The appointment of John Healey, who quit as defence secretary last month over a row about the pace of increases, as chancellor has fuelled speculation that Labour could go further and faster, potentially reopening spending reviews to find an extra £9bn a year by 2030. Streeting declined to say whether the government would meet a 3% target by 2030, deferring to Healey on budget specifics, while also criticising Israel's conduct in Gaza and the West Bank during his Farnborough appearance.
In short
- Streeting says defence spending will boost economic growth under Burnham
- UK reaffirms plan to raise defence spending to 3.5% of GDP by 2035
- Chancellor Healey's appointment raises hopes of faster spending increases
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Defence spending is essential infrastructure for national security in an era of renewed great-power competition, and military investment generates genuine economic returns through high-skilled manufacturing, technological innovation, and export opportunities that benefit the broader economy. Strategic deterrence prevents catastrophically costlier conflicts, and NATO commitments reflect binding obligations to democratic allies—investments that ultimately protect British prosperity and values by maintaining the security framework within which economic activity can flourish.
The case against
Whilst defence has a legitimate role, the £25bn increase represents resources desperately needed in public services facing acute crises: the NHS is under severe strain, education standards are declining, and millions struggle with living costs. Defence spending yields modest economic multipliers compared to infrastructure or research investment, and spiralling military budgets globally create dangerous security escalation; genuine security rests on diplomatic strength, development assistance, and meeting citizens' foundational needs.
Explained simply
Nato is a military alliance whose members agree to support one another if attacked. It asks members to spend a share of their national income on defence, and the UK’s plans are measured against those targets.
Defence spending pays for the armed forces, equipment and support for military suppliers. The government must decide how quickly to increase it and how to fund the rise, while balancing other public services and showing that the Ministry of Defence uses its current budget effectively.
Wes Streeting is the defence secretary, responsible for the department and its spending; the chancellor oversees the government’s finances. Their decisions matter to the armed forces, the defence industry and the wider economy, as public money directed to defence is not available for other priorities.
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