Spring Statement 2025: Chancellor boosts defence spending and job creation

As part of today’s Spring Budget, the Chancellor has announced a major increase in defence spending, committing 2.5% of GDP to defence from April 2027, the largest boost since the Cold War.

This includes an extra £6.4bn by 2027 and an additional £2.2bn for the Ministry of Defence in the next financial year.

Reeves said: “We have to move quickly in this changing world, and that starts with investment.

“As defence spending rises, I want the whole country to feel its benefits.”

The plan aims to make the UK a defence industrial superpower, investing 10% of the equipment budget in new technologies, drones, and artificial intelligence (AI).

The increased technology spending aims to benefit manufacturing hubs in Glasgow, Derby, and Newport will benefit, creating demand for highly skilled engineers and scientists while unlocking new business opportunities for UK tech firms and startups.

A protected £400m budget for defence innovation has also been established.

The government will also reform the defence procurement system, ensuring small businesses gain better access to Ministry of Defence contracts.

Additionally, a £200m investment in Barrow will create thousands of jobs in the town at the heart of nuclear security, while the future of Portsmouth Naval Base will be secured, alongside better housing for military families.