Sunak must find £42bn in tax hikes, spending cuts or borrowing for defence vow

16 May 2023 , 23:01

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Rishi Sunak has said he wants to raise defence spending to 2.5% of GDP (Image: UKRAINIAN PRESIDENTIAL PRESS SER)

Rishi Sunak must find £42billion of tax rises, spending cuts or borrowing to meet a defence funding pledge, experts warn today.

The UK currently spends 2.16% of GDP on the armed forces - just above the 2% NATO benchmark.

The Royal United Services Institute think tank said the amount Britain spends on defence is set to increase to 2.27% in 2024/25 – or 2.35% if the UK’s spending on military aid to Ukraine is included.

But if the Prime Minister’s “new aspiration” to spend 2.5% of GDP on defence is to be met by 2030 “it would require as much as an additional £42bn to be found through tax rises, increased borrowing or reduced spending in other areas”, warned RUSI.

It pointed to building of the Royal Navy’s four, nuclear-armed, Dreadnought-class submarines, the Aukus programme for nuclear-powered attack subs and the Tempest fighter jet scheme as big projects needing billions of pounds of investment.

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The Tempest project will cost tens of billions of pounds (BAE Systems)

The programmes “will all require significant amounts of capital funding”, said the world’s oldest defence and security think tank.

Mr Sunak has not set a deadline for hitting the 2.5% target he unveiled in March.

In setting the ambition, he scrapped his predecessor Liz Truss’ plan to reach 3% of GDP by the end of this decade at an estimated cost of £157bn.

RUSI deputy director-general Professor Malcolm Chalmers: “Whoever wins the next election will face tough choices when it comes to defence spending.

“If they decide to raise the core defence budget to 2.5% of GDP – Rishi Sunak’s aspiration – this would require an additional £42bn in spending over the next five years – money that would probably need to come from further tax rises.

“If – as is more likely – defence spending rises much more slowly, then the Ministry of Defence will find it very hard to fund all the major programmes now under discussion.”

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Ben Glaze