Defence Investment Plan
House of Lords · Lords Chamber · 1 Jul 2026 · 50 speeches · Official Report
Statement
The following Statement was made in the House of Commons on Tuesday 30 June.
“With permission, I will make a Statement on the defence investment plan.
Our Armed Forces represent the very best of us, from our sailors patrolling the High North and protecting the seabed, to our pilots, air crew and air defence teams in the Middle East defending the skies, our paras in the south Atlantic and our marines in the channel. As I speak, we have personnel supporting the humanitarian mission in Venezuela, submariners beneath the waves maintaining our unbroken chain of protection, and planners at Permanent Joint Headquarters making the most extraordinarily complex challenges appear routine. Our service men and women rightly inspire respect, gratitude and pride across the House and across the nation. We all recognise that they serve at an increasingly dangerous and unpredictable moment in history. The central purpose of the defence investment plan, which we publish today, is to ensure that they have the kit and the technology they need in order to do the difficult job we ask of them. I know at first hand just how important that is, and when I was appointed Defence Secretary a couple of weeks ago I promised to get it right. Today, I make good on that promise.
Before I set out the details, I want to take the opportunity to thank the many hundreds of colleagues in the Ministry of Defence, in and out of uniform, who have worked so hard to prepare this plan. Over the last few weeks it has been a privilege to work with them, as it has been to work with my ministerial team. In particular, I pay tribute to the Minister for Defence Readiness and Industry, my honourable friend the Member for Plymouth Sutton and Devonport, Luke Pollard, who I know has invested many months in getting the plan right.
I also want to place on the record my profound thanks to my right honourable friends the Prime Minister and the Chancellor of the Exchequer for their support, and for the spirit of good will that has guided our negotiations over the past fortnight. They have, for two years, demonstrated steadfast commitment to our national security, and as a consequence our Armed Forces are better prepared and better supported today. It is important to add that Ukraine is still strong in the fight, and that over the past two years Britain has proved itself to be a reliable ally and a trusted partner.
I also pay tribute to my right honourable friend the Member for Rawmarsh and Conisbrough, John Healey, who, as Secretary of State, dedicated his time and worked in order to deliver this plan. He set out to the House in clear terms why he could not support an earlier version of the plan; I will lay out what has changed, and why I can support it.
This plan now commits more investment in our Armed Forces: £298 billion over the next four years. That includes an additional £15 billion on top of last year’s spending review settlement, of which most is extra day-to-day spending for training and improving the availability of ships and aircraft to increase our warfighting readiness. That is £1.5 billion more than when I took up this job just a couple of weeks ago, and it means that defence spending will now increase in real terms by 27% between 2023-24 and 2029-30. That is a bigger increase across a Parliament than any present Member of this House has ever seen. It means that the £74 billion allocated to our Armed Forces next year is now £20 billion more than the allocation in the last year of the previous Government, and it means that by the end of the decade the proportion of GDP spent on defence will be greater than it has been at any time during the last 30 years.
We have made some difficult but necessary decisions to fund this, but our fiscal rules have been upheld and day-to-day spending on front-line services has been protected. All departments were asked to contribute 1% of their capital budgets from this year, while those with larger resources-the Department for Transport with its roads budget, and the Department for Energy Security and Net Zero-were asked to make further contributions. Full details are set out today in a Written Ministerial Statement. To reinforce that additional investment, this Labour Government are announcing a new £50 billion defence export facility to support British defence firms in winning contracts across the globe.
More money matters-of course it does-but so do the choices that we make on how to spend it. I have therefore decided to reprioritise a further £1 billion in the plan, to ensure that it better reflects the way in which war is waged today. It will provide our service personnel with the capabilities that they need to deter and fight, now and in the years ahead. The war in Ukraine has seen battlefield technology advance faster than at any time in history, and few have done more to ensure that our Armed Forces have kept pace than my honourable and gallant friend the Member for Birmingham Selly Oak, Al Carns. I thank him for his service, and for the work that he did as a Minister. He will know that artificial intelligence, autonomy and uncrewed systems are no longer capabilities of the future, and through the DIP they will now receive the sustained investment that reflects their strategic importance.
Today, we commit the UK’s largest ever investment in drone warfare: £5 billion for strike, protector and surveillance drones across the Royal Navy, the Army and the Royal Air Force; anti-submarine vessels, uncrewed ground vehicles and fighter jets; a new uncrewed systems taskforce to rapidly develop and field new autonomous capabilities; and funding for Europe’s biggest drone testing site, the Uncrewed Systems Centre in Swindon, which I opened on my very first day in the job. That project is thanks to the efforts of my honourable friend the Member for Swindon North, Will Stone. We will also invest nearly £2 billion to integrate our Armed Forces through a new digital targeting web, underpinned by the most advanced AI and software, cutting the time from decision to strike faster than ever before, along with £100 million for the defence AI taskforce and another £115 million to raise our defences against the threats from AI.
It would be reckless to ignore the lessons from Ukraine, but it is important to remember that we are not Ukraine. We are a member of NATO, and a nuclear power. In this year alone our Armed Forces have been deployed to the High North and the Middle East, and they are now readying themselves for the prospect of regenerating Ukraine’s forces and reopening the Strait of Hormuz. All the while, they protect our island home and retain the ability to respond to crises in dangerous and distant lands.
Britain needs a flexible, hybrid, integrated, ‘high-low’ force that can deter and fight across every domain. That is why we are committing £8.6 billion to the Global Combat Air Programme, proudly in partnership with our allies, Japan and Italy. This next-generation stealth fighter jet is in addition to the £1.1 billion Typhoon upgrade, and will ensure that our RAF retains control of the skies. We will invest £26 billion to fund the most extensive naval base upgrades for nearly half a century, including at Faslane, Portsmouth and Devonport; £790 million to protect the UK homeland and our overseas bases from air, drone and missile threats; and £11 billion in munitions and weapons to increase UK stockpiles, including long-range strike capabilities, low-cost cruise missiles and one-way effectors. By 2030, we will build at least six new energetics factories.
Today, we commit £64 billion to fund Dreadnought and AUKUS submarines, a new warhead and other crucial nuclear work. Our independent nuclear deterrent is the ultimate guarantor of our security, and in providing the funding to renew it, we extend that promise long into the future. We will also purchase F35As and join NATO’s nuclear mission. Our security is now contested in every domain, so we will invest over £3 billion in space capabilities, £2.5 billion in cyber, and £400 million to protect our undersea cables and pipelines.
In the end, it is people who win wars and preserve peace. By delivering three above-inflation pay rises, extending childcare provision and putting fully into law the Armed Forces covenant, this Labour Government have demonstrated our commitment to what matters most. Building on the work already done to fix 1,200 of the worst homes, today we commit £9 billion over a decade to raise the condition of military family housing to a standard that matches the service and sacrifice of those living in it. Through a new defence housing service, we will implement the defence housing strategy in full, fulfilling our moral obligation to personnel and their families.
The DIP represents significant progress in implementing the vision set out in our strategic defence review. We will invest more and target better, but there is much more work to be done. It was not for nothing that the UK made a promise to our allies, just as they did to us: 3.5 by ’35. In a more dangerous world, our commitment to NATO is absolute. I gave my word to the Secretary-General and all our allies that our promise will be met, and a credible plan will be produced to ensure that it is. We will reach 3% in the next Parliament, with funding set out at the next spending review, in which defence will be the number one priority. Britain has always met our NATO spending commitments, and under this Government we always will. Britain has always stood with our allies, and under this Government we always will. This plan accelerates the development of deep-precision strike weapons and close support artillery with Germany, and it creates an amphibious combined fleet with the Netherlands. We will also invite Joint Expeditionary Force nations to join our Northern Navies initiative and build a hybrid force together.
I now have a responsibility to make the plan work, not least given what Cabinet colleagues have forgone from their budgets in order to support mine. My commitment to them, and indeed to the British public, is that with the requirement to spend more on defence comes a duty to spend more wisely on defence. This plan includes a pledge to make substantial savings by the end of this Parliament, as well as a commitment to drive down fraud and error across defence.
I am grateful to our partners in industry for their counsel and support during this process. I know that recent months have not been easy, but with the DIP now published, I am relying on the full spectrum of our industrial base to make it a success: primes and small and medium-sized enterprises; workers and trade unions; and innovators and investors. Together, we will ensure that the benefits of this plan will be felt right across the United Kingdom. We will develop sovereign and dual-use technologies, increase exports, generate growth and reindustrialise our economy.
Today, I am proud to confirm that with the publication of the DIP comes the promise of greater security for families and new opportunities for our young people. According to MoD analysis, this plan will support nearly 60,000 additional good, skilled jobs right across our union. That will be achieved alongside a culture shift in procurement.
Ultimately, the success of this defence investment plan will be measured by whether it commands the support of the amazing men and women who serve in our Armed Forces. They remain our most important asset -respected by those who stand with us and feared by those who stand against us. We know that they are equal to any task, and with this defence investment plan, we give them the means to match their courage. I commend this Statement to the House”.
My Lords, I thank the Minister for both the briefing and prior sight of the defence investment plan, which he provided to me and my colleague, the noble Earl, Lord Minto, yesterday. I doubt any plan was so dogged by delay and preceded by such drama as this one, but that doleful prelude was eclipsed by the gloom and scepticism that engulfed the plan when it became public. To quote my honourable friend in the other place, Mr James Cartlidge, it is “too little, too late”. The threat we face is now. This plan, lacking in significant detail, is for the next four years. It was intended to deliver the recommendations in the SDR. It does not. It should have laid out a path to the 3% of GDP needed before the end of this Parliament, never mind during the next one. It does not. As for a path to NATO’s target of 3.5% of GDP by 2035, that apparently remains in the mists of the Prime Minister’s imagination: undiscernible and shortly to disappear. The Prime Minister criticises the previous Government for not spending enough, but I point out to your Lordships that my party responded to the threat as we understood it then, in the wake of a searing economic challenge inherited from a Labour Government in 2010. However, despite austerity, we kept the RAF Lossiemouth air base open; ordered the vital Poseidon planes that operate from there; ordered eight Type 26 frigates and five Type 31 frigates, which are being built now; launched the Global Combat Air Programme to produce the next-generation...
My Lords, this is clearly a very delayed and extremely underfunded plan. As we have heard, at £15 billion it falls well short of the £28 billion requested by the defence chief to keep our country secure. But we know that it actually falls even shorter than that, as nearly £5 billion is unfunded and some £11 billion or more relies on undetermined efficiency savings. So, after months of paralysis, resignations and Cabinet chaos, the Government have short-changed the Armed Forces. However, we should remember that it was the Conservatives who hollowed out our military, leaving the Army and Navy smaller than they had been for hundreds of years. The Tories failed to look after service personnel properly, through a lack of suitable housing and poor mental health support-that was unforgivable. This Statement is a long way from solving these vital issues and many others. It is a political choice made by Sir Keir Starmer and the Treasury, and it leaves us less safe. Furthermore, it undermines our reputation as a leader in NATO. Last year, all NATO countries pledged substantially to increase investment so that we all hit 3.5% of GDP by 2035. But, even if the missing money is found, the share of GDP that we spend on defence by the end of the decade will be only 2.7%. In media interviews today, the Procurement Minister, Luke Pollard, said that the spending review next year will describe a pathway to 3.5%. That review will need to find an extra £25 billion per year to get to our stated...
I thank the noble Lord, Lord Fox, and the noble Baroness, Lady Goldie, for their contributions and important questions. I will start by dealing with the question of spending, which goes to the heart of what both noble Lords were saying. Let me put on record some of the things that were said about the defence investment plan. I will make only one political point-that there will be a 27% real-terms increase in defence spending between 2023-24 and 2029-30-because all of us have at heart the security and defence of our nation and how best we should do this. As both noble Lords and the House will know, the Government have set out plans for an agreed £15 billion increase in spending. This is outside the normal spending review process. That is not necessarily the way that Governments normally do things, but I gently remind the noble Baroness that it is not unheard of for Governments to take action outside the new spending process and to refer to the next Budget as the place where the detail will be confirmed. Indeed, the previous Government announced their five-year NHS plan in 2018 outside the Budget and the spending review. What did they say when challenged about it? I think the noble Baroness and the noble Lord, Lord Fox, will know: “We will be able to explain exactly where every penny is coming from, but we will do it in the next Budget”. I will also refer to when the Conservatives published the integrated defence review in 2020. What did they do? They said that they would set...
My Lords, all European countries are struggling with coming to terms with new realities and what that requires for their defence and equipment to be appropriate to modern warfare. However, irrespective of the money and the percentages spent, if we do not start the national conversation-which we have been talking about for several months, if not years, now-the British public will not accept that they will have to accept cutbacks in other areas to defend our borders and our airspace, and, above all, the sea around us. Let us not forget that we are a nation, and our resilience and our capability to defend ourselves is not just about money; it is all about the support of the people. Can we start with that now?
Indeed, we will come forward with proposals and plans with respect to a national conversation. The noble Baroness is right in her suggestion. We can see-many Members of this House will know this-that some of the ways in which the Government have asked different departments to contribute to this uplift in defence spending are already starting to cause some angst among certain communities. For example, in the east Midlands, where I live, the building of some roads is now being delayed, which is causing people to say, “Where’s the money going? What’s it being spent on?” Of course, having a national conversation is right, and the Government and all of us in here will have to make the case that defence is a priority, and that may require us to reallocate resources from one budget to another. We started that process, but as part of that process we must have the national conversation the noble Baroness refers to.
My Lords, I welcome part of this plan-it obviously has some holes in it, as we have already heard. I also welcome, as I do every time I hear the Minister speak, a great deal of his comments and his profound thinking. However, I wonder today whether the brief he has been given really tells the whole story. Not only have we heard about the deficiencies on the arithmetical and budget side but in the Second World War, for instance, our military spending rose to 69% of our total budget, and here we are, talking about 3% and 3.5%-it may be rather more than that when we look at the unfolding scene. I just wonder whether we should not be a bit more frank with the British people-or whether our briefing or the Government’s words should-in reminding them that we are beginning to move towards a total war footing. The late Lord Skidelsky often reminded this House that this is the way we are going, and we will have to seriously consider the sort of percentages that I am talking about. I am not sure that term comes through at all in the blue paper that we have all been given to read. I am very pleased that we are reaffirming the huge global combat air co-operation between ourselves and Japan and Italy. This link with Japan and Japanese industry is hugely important. It is one of our ways into the giant consumer markets of Asia, which is where all the action is going to be. So good on that, but let us have a brief that honestly faces the fact that we are moving towards a war footing, and...
I thank the noble Lord for his question and his comments, which come from a great knowledge and experience, and I thank him for his remarks about me. Just to reiterate, the GCAP programme is extremely important, and as he just said, that is outlined in the money allocated within the paper. The debate is about how quickly we move towards increased spending, and I have outlined-without repeating myself-how the next spending review in 2027 will look to 3% but that the absolute commitment is to 3.5% to reflect the change in the security environment in which we are operating. In addition, I mentioned the nuclear deterrent, and across this House we have mentioned the importance of preparing for war, because one of the ways you deter war is to prepare for it.
Baroness Foster of Aghadrumsee
First, I welcome this Statement, which this House has been waiting on for some time, and share my concerns about the funding, which I hope will be sorted out under new leadership. However, I welcome the fact that there is an emphasis on innovation and supporting small businesses, and I hope to see that coming through. In terms of the detail of the plan, I note that there is £330 million to be spent on investment in critical underwater infrastructure protection to tackle hostile activity within UK waters. I have raised this issue with the Minister before. Can we expect the Republic of Ireland’s Government to pay towards helping with that undersea capability, because, as he knows, it is as important to the Republic of Ireland as it is to the UK?
I cannot give the noble Baroness an assurance about what the Republic will pay for, but let me just say that there has been improved and increasing co-operation between the Republic and ourselves where it is in both our interests to do so. She will know that underwater cables and underwater infrastructure are important to the Republic and to the whole of the UK, so it is in both of our interests to work together. I cannot give her a commitment about paying for that, but I can give her the commitment that there is increasing co-operation and working together to deliver the shared objectives we would all have.
My Lords-
My Lords-
My Lords, I think it is time to hear from the Labour Benches and then we can hear from the Liberal Democrats.
My Lords, I welcome the publication of the defence investment plan and the recognition in it that science, technology and innovation are going to play a very big part in the future. Does my noble friend agree that it is not just a financial challenge that faces the defence investment plan; there is also a credibility challenge? We are going to have to explain to the public more effectively than perhaps we have been able to do so far exactly why we need a funding plan to reach 3% of GDP by 2030 and 3.5% by 2035.
Indeed, as I said to the noble Baroness, of course we need a conversation to more fully and carefully explain to the public why we need to increase our expenditure on defence and security and, alongside that, to help them to understand why that might mean changed priorities for budgets within the sort of priorities that people would have. Whether that means less spending on this area or that area of government, I think we would all agree that the increase for defence and security is essential, and there will be difficult decisions ahead. As part of resolving that, we need to talk openly to the British people.
My Lords, one of the unfortunate realities is that the United States is moving away from the defence of Europe. Whether we like it or not, this is not just for this Administration; it is a danger that is likely to happen in future as well as the US looks to the Pacific. We understand that, and we understand that Europe should take more effect of its defence, but there are a number of capabilities that are not replaceable if the United States is not there-strategic airlift, a lot of the space intelligence, ISR and missile defence. I see nothing in this strategy or this expenditure report that tries to replace that. Clearly, one sovereign nation cannot do that, so how does Europe, together perhaps with Canada, ensure that we can defend ourselves into the future?
There is a lot in the strategic defence review and the Defence Investment Plan about building up a greater sovereign capability in some of the areas that the noble Lord has addressed. But I think it is important in every debate to say that the alliance between the United States and our country and the alliance between the United States and Europe, notwithstanding the fact that the President has called for Europe to do more for itself, is absolutely essential to the defence and security of our country. The noble Lord may disagree, but I am telling him what the Government’s view is. The Government’s view-and, I am sure, the view of the vast majority of your Lordships’ House-regards the alliance between ourselves and the United States as absolutely essential for the security of this nation, so we have to be very careful about that. Of course there are challenges and difficulties, but the document refers to how we build up some of the capabilities to which the noble Lord refers. Of course Europe needs to do more, but it also needs to stand with the United States, not only in Europe but across the globe.
My Lords, I share widely the view that this belated DIP comes nowhere near funding the strategic defence review, but the DIP does make clear the Government’s commitment, together with Japan and Italy, to the next-generation Global Combat Air Programme. This is welcome news, given the inevitable withdrawal of the RAF Typhoon air fleet from front-line service due to airframe fatigue and age in the early 2040s. Following the recent break-up between Germany and France on their similar programme, what political approach are the Government making to Germany to get them interested in GCAP?
The noble and gallant Lord is right to point out the importance of GCAP and how it offers a sixth-generation option for us after 2040, when Typhoon is expected to go out of service. There is money in the defence investment plan for the upgrade of Typhoon to ensure that it has the capability that it needs until 2040. Regarding other partners in GCAP, as I said to the noble Lord, Lord Fox, we are open to discussions with anybody who comes to us with proposals or desires to join that programme, but that will be a matter for international negotiation between ourselves, Italy and Japan, although we are not opposed to looking at having further partners as part of that scheme.
My Lords, may I say that this is a disappointment, to put it mildly? I am on the same side as the Minister on this. This, I assume, was what led John Healey to resign-I suspect that it was the same document. Given that, does he think that any other Minister should resign, given the appalling lack of money in the Statement?
There is an additional £1.5 billion, and there are also some changes with respect to the way in which there is a greater emphasis in this document on autonomy, AI and the transformation of the Armed Forces to have more new types of aircraft, vessels and capabilities. For me, that is as important as the amount of money, compared with not spending on new capabilities. But I would just say to the noble Lord that it requires difficult decisions to do that. On replacing the Type 45, we have scrapped the plans that we had in the document in favour of replacing them with new, uncrewed vessels. That requires us to make really big decisions, and there are a number of those sorts of decisions all through the document. Of course there is a debate about the amount of money, which is why I have talked about the 2027 spending review, but it is also about the type of capabilities that we need. The document shows that we are not afraid to make big decisions around that to give us the capabilities that we need in the future as well.
My Lords, is it not clear that this is a welcome step forward, but that it cannot be the end of the story? We have to reaffirm our commitment to 3% by the end of this decade, and 3.5% by the middle of the next decade, as firm commitments of this Labour Government, and that in the period ahead we will carry out the kind of national conversation that was referred to earlier, and find a means of getting there. With due respect to noble Lords opposite, you cannot achieve this just by welfare cuts.
In terms of the spending, I have made the point about the 2027 spending review, and that the document lays out that we will come back to the 3% commitment at the 2027 spending review, and, of course, the 3.5% commitment is laid out in the document as well. That lays out what the Government’s plans are.
Baroness Bloomfield of Hinton Waldrist
The noble Lord, Lord Liddle, has just alluded to the elephant in the room, which is that there are no cuts to the £333 billion welfare bill, which would go a long way to helping with additional support for the defence industry. My worry is that most of these cuts are unknown, and they are optimistic efficiencies, but I know that the £2 billion being cut from the BEIS budget is a worry. How is this going to affect Mr Miliband’s ambitions for net zero?
I do not know about the ambitions for net zero. All I can say to the noble Baroness is that, of course, spending is important, and increasing the amount of spending on defence is important. Whatever decisions are made will require the reprioritisation of budgets for what the Government plan to do. That is the reality of finding more money for defence. We are ensuring that everything in the current plans, and the defence investment plan, is funded. The spending review will come back to how it is funded beyond 2029-30, and how that is done will be a matter for that review.
My Lords, I was head of the Treasury’s defence division, and I welcome all this concentration on the money, but the document is actually about investment and where the money is to be spent. Ukraine is making, using, and losing 7 million drones a year. The life cycle of any particular model of drone is under three weeks, because they have to be continually reprogrammed because of countermeasures, so I rather like the emphasis in this document, in section 3.2, on industrial agility. I hope that the Minister can deliver on industrial agility, as it is crucial that the Ministry of Defence gets away from operational requirements that are negotiated for months and fixed for years, and accepts that there has to be an open partnership with business, and a two-way flow of intelligence and innovation. From now on, the weapon is the production facility, the drone is only the bullet and the only constant is change.
I agree with that. In the document, it talks about the need for the transformation of our Armed Forces, and much of that will be around uncrewed capabilities and drones. It is not only about big primes; much of this, including in Ukraine as the example, is delivered by small and medium-sized businesses, which have that particular agility to which the noble Lord refers, and we need to develop that.
Baroness Bennett of Manor Castle
My Lords, with the honourable exception of the noble Lord, Lord Kerr, much of our debate today, as in the many months leading up to the defence investment plan, has focused on the bottom line and where the money is coming from; we have, unfortunately, had far less debate about how the money is being spent. I note that less than £10 billion over four years is set aside for homeland defence in areas such as cyber security, air and missile defence, and undersea infrastructure protection. By comparison, about £100 billion is being spent on nuclear submarines and jet fighters, AUKUS subs and cruise missiles. As the leading article in the Guardian said today, we are still binding our force structure to an American-led posture. Is that not deeply dangerous in the current geopolitical circumstances of an unstable, uncertain America?
“No” is the answer to the noble Baroness’s question. Homeland defence runs all the way through the document: how we have better air defence, what we do about improving the use of reserves, and various protections for our critical national infrastructure, which is really important. As I have said before, on our alliance with the United States, the development and maintenance of things such as our nuclear deterrent are really important, not only for our defence and security but for the defence of Europe and beyond, and we should continually reiterate that.
My Lords, I put it to the Minister that it would have been better to have had the conversation with the public before we put out the policy, so that we had rolled the pitch and people understood the nature of the threat. I welcome, therefore, what he is saying about the position going forward, but can we also make sure that the public understand the chronic neglect of our defence capacity that took place under previous Governments-notably the Annington housing and the neglect of maintenance-not least the failure to order nuclear submarines and the six-year delay between 2010 and 2016, which has left us in a very difficult position regarding our deterrent and our crew? Will the Government be making clear who the guilty men and women were?
The catastrophic decision to pick out of what my noble friend said-given the importance that I, the Government and Members across this House attach to this-was the delay in 2010 for a number of years in renewing the nuclear deterrent. That was a really bad decision, and as a result our nuclear submarines are at sea for months and months. That is a problem we have to deal with, as is the fact that renewal of the deterrent, which is included in the defence investment plan, will be later than we would wish. My noble friend talked about Annington Homes. It was a disastrous decision to privatise it, and we have brought it back in at a cost of £6 billion. I know that a number of people who wanted to ask questions were unable to. We have the Armed Forces Bill on Monday, and if noble Lords and Baronesses wish to ask a question then on the defence investment plan, I am perfectly happy for them to do that, so that they do not feel that they have missed the opportunity to ask about something which is massively important to the defence and security of our nation and beyond.