Fact check: Ministers have plans to spend 2.5% of GDP on defence by 2030

If GDP forecasts are correct, that would mean spending £87.1 billion a year on defence.

Mr Shapps is the Defence Secretary (Owen Humphreys/PA) (PA Wire)

Defence Secretary Grant Shapps said “we’ve put 2.5% of GDP into defence.”

Evaluation

The Government has not yet allocated that amount but has announced a plan which it says would take defence spending to 2.5% of gross domestic product (GDP) if re-elected.

The facts

On April 23 2024, the Government announced a policy which would increase spending on defence as a proportion of GDP.

The plan was “moving from an aspiration to spend 2.5% by an unspecified date to a costed commitment to do so in 2030,” according to an official press release.

The commitment is to raise spending as a proportion of GDP to 2.32% in the 2024/25 financial year, then up to 2.50% in the financial year ending March 2031.

That would mean that UK defence spending reaches around £87.1 billion in the year ending March 2031, some £23 billion higher than in the year ending March 2025.

The figures assume that the UK’s GDP – the main measure of economic growth calculated by the Office for National Statistics – rises from £2.786 trillion in the year ending March 2025 to £3.483 trillion in the year ending March 2031.

The Government said it based those presumptions on estimates from the Office for Budget Responsibility (OBR), a non-departmental public body funded by the UK Treasury, that was set up to provide independent economic forecasts and independent analysis of the public finances

However, the most recent OBR forecasts only go up to the year ending March 2029.

The OBR forecasts that nominal GDP – a measure it uses which does not adjust for inflation – would grow by 7.0% in the 2023/24 financial year, followed by growth of 2.0%, 3.2%, 3.8%, 3.7% and 3.7%.

To achieve the final two years of GDP growth in the figures the Government provided, it assumes another two increases of 4.2% in the years ending March 2030 and March 2031.

Links

Mr Shapps’s post on X (archived post and video)

Gov.uk – PM announces ‘turning point’ in European security as UK set to increase defence spending to 2.5% by 2030 (archived)

Gov.uk – Our committment (sic) to 2.5% of GDP in 2030 (archived)

Gov.uk – Defending Britain (archived)

What is GDP (archived)

OBR – Economic and fiscal outlook – March 2024 (archived)