Britain preparing for biggest defence spending boost since Cold War? Starmer may approve $24 billion package: Report

United Kingdom is finalising a defence spending plan and will publish it as soon as possible, a spokesperson of Keir Starmer's administration informed Reuters. Amid battle for political survival, British Prime Minister Keir Starmer is expected to approve an increase of 18 billion pounds ($24 billion) in defence spending, The Times report said on Friday.

According to the spokesperson, the British government's defence investment plan will aim to deliver equipment and technology to frontline forces quickly while supporting economic growth. After one of main rivals of Starmer in the government stepped down, the British Prime Minister seems to be struggling to hold on to power. It was a tumultuous week for Labour Party leader who was accused of lack of vision while others positioned themselves for potential challenges to his leadership.

The biggest blow to Keir Starmer-led government came three weeks ago when one of Prime Minister's longest supporters in Westminster, the Energy Secretary Ed Miliband, called the former prosecutor, urging him to set a timetable to leave office. According to Bloomberg report, Starmer refused to consider this request and argued that his departure would hand power to the populist architect of Brexit, Nigel Farage. Weakened by personnel scandals, fiscal struggles and dismal election results, Starmer is facing calls from more than one-fifth of his party to go.

On Friday, UK's governing Labour Party agreed to let Greater Manchester Mayor Andy Burnham seek a return to parliament marking a step towards a possible challenge to Starmer's leadership. To bring an end to months of delays and internal rows, Britain's leadership is expected to approve the spending boost as soon as next week. However, the details of increase in spending have not been shared yet but it would be “fully affordable,” a source familiar with the matter informed The Times.

The development around this major funding increase comes almost a month after finance minister Rachel Reeves said she did not favour tax hikes or higher borrowing to fund increases in defence spending. After Russia's full-scale invasion of Ukraine and the West Asia conflict, this has become a priority.

Prime Minister's Office in a press release dated 25 February 2025 stated, “As the UK faces a period of profound change, with conflicts overseas undermining security and prosperity at home, the Prime Minister has today (Tuesday 25 February) set out that his commitment to increase spending on defence to 2.5% of GDP from April 2027.”

It added, “He has also set an ambition to spend 3% of GDP on defence in the next parliament, as economic and fiscal conditions allow, in order to keep the British people safe and secure for generations to come.”

According to Britain's budget watchdog, this move would require an additional 17.3 billion pounds a year by 2029–30. The government will have to cut spending in areas such as public spending to finance the bigger defence budget if it rules out raising taxes or borrowing more.