Prime Minister Keir Starmer has published a plan to increase defence spending significantly over the next few years. The plan commits Britain to spend 2.7% of its GDP on defence by 2027/28 — that is, 2.7% of the total value of everything Britain produces. This meets NATO (the military alliance that includes Britain, the US, and most of Europe) requirements, according to the Defence Investment Plan published by the Ministry of Defence.

At the heart of the plan is a £15 billion funding boost to strengthen the armed forces. The government says this spending will create nearly 60,000 new jobs in industry. The plan also sets aside £790 million over four years to improve air, drone and missile defences at British military bases both at home and abroad, including new radar systems, according to Reuters.

Understanding the 2.7% figure

The 2.7% means defence spending only — the guns, planes and soldiers. But Britain's wider commitment is larger. The government also pledges to spend 5% of GDP on broader security — things like protecting energy supplies and critical computer systems, alongside traditional defence. This broader 5% figure was first announced at a NATO summit in June 2025, and the plan published on 30 June 2026 shows how Britain intends to deliver it.

Why this plan matters now

The plan was supposed to come out in 2025 but was delayed. Military leaders issued public warnings in early June 2026 that Britain was running out of time. The Prime Minister then personally told NATO's Secretary-General Mark Rutte on 13 June that the plan would be ready before NATO's summit in July 2026. It arrived with days to spare. Publishing a detailed plan before the summit sends a signal to other NATO members that Britain is serious and has done the maths — rather than simply promising larger percentages.

Better housing for military families

The plan also includes commitments to improve housing for armed forces families. The government bought back 36,347 military homes from private ownership in December 2024. It then added an extra £1.5 billion for military accommodation. Plans have been submitted to build 265 new energy-efficient houses at RAF Brize Norton.

What comes next

The 2.7% figure is above the 2% minimum that NATO members used to argue about for years. But NATO now wants member states to spend 3.5%, and Britain is not committing to that yet — the gap is being covered by the broader 5% figure instead.

For the government's finances, this is a stretch. Defence budgets will have to grow faster than most other government spending at a time when money is tight. The claim that 60,000 jobs will be created will be checked carefully by government watchdogs and independent economists — such job numbers can sometimes prove too optimistic. The real test will be whether these spending targets survive future government budgets.