Defence budget will remain at least 2% of GDP, Chancellor announces

Jeremy Hunt has said he will maintain the defence budget at a minimum of 2% of GDP.

The Chancellor told the Commons he and the Prime Minister "both recognise the need to increase defence spending", adding: "But before we make that commitment it is necessary to revise and update the Integrated Review, written as it was before the Ukraine invasion.

"I have asked for that vital work to be completed ahead of the next Budget and today confirm we will continue to maintain the defence budget at least 2% of GDP to be consistent with our Nato commitment."

Mr Hunt also said the UK "is and has always been a force for good in the world", adding: "Nothing sums that up more than the courage of our Armed Forces.

"Men and women who risk their lives every day in defence of our territory and our belief in freedom.

"Alongside them, I salute the citizens of another country, right on the frontline of that fight today, the brave people of Ukraine.

"The United Kingdom has given them military support worth £2.3bn since the start of Putin’s invasion, the second highest contribution in the world after the United States, which demonstrates that our commitment to democracy and open societies remains steadfast."

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Shadow defence secretary John Healey criticised the announcement, saying: "The first duty of any government is to defend the country and keep its citizens safe. But there was no new money for Defence today to plug the shortfall created by the Defence Secretary.

"The Defence Secretary agreed to a real-terms cut in MOD day-to-day spending in 2021, and this has only grown on his watch. This means less money for Forces pay, recruitment, training and family support. 

"Since the invasion of Ukraine, Labour has been arguing for defence plans to be rebooted - just as 20 other NATO nations have done. But despite threats increasing, the OBR (The Office for Budget Responsibility) confirms today that 'defence spending is held flat as a share of GDP'."

Nato HQ
Nato sets alliance members the aim of spending 2% of GDP on defence (Picture: Nato TV).

Rishi Sunak replaced Liz Truss as Prime Minister in October.

Ms Truss had pledged to increase defence spending to 3% of GDP by 2030, a move which at the time was "great to hear", according to Conservative MP Tobias Ellwood, Chair of the Defence Select Committee.

He said he hoped the decision would "reverse some of the cuts outlined in the Integrated Review", adding: "Our Armed Forces are absolutely overstretched at the moment."

However, when running to replace Boris Johnson as PM, Mr Sunak described Ms Truss' pledge as "arbitrary" but said he would never "short-change" the Armed Forces if he moved into Number 10.

"Simply saying 3% [of GDP allocated to defence] isn't a plan, it's an arbitrary target. Rather, we need to provide our military with the resources it needs to do what it needs to do to keep us safe," he added.

Towards the end of Ms Truss' short reign as Prime Minister, Armed Forces Minister James Heappey said he would quit if Mr Hunt, who the former PM had just appointed as Chancellor, backed down on the defence spending pledge.

Mr Hunt promised to "tackle the cost-of-living crisis" and "rebuild our economy" as he set out plans for tax rises and spending cuts in the Autumn Statement on Thursday.

The Chancellor said there would be a "shallower downturn" as a result of his measures but the Office for Budget Responsibility (OBR) believed the economy was "now in recession".

He told MPs his three priorities were "stability, growth and public services".