TO DELIVER ON its commitment to spend 3% of GDP on defence by 2030, Liz Truss’s government will need to increase defence spending by about 60% in real terms.

This is equivalent to about £157 billion in additional spending over the next eight years, compared with current planning assumptions. By comparison, the 2020 Spending Review, and the associated Integrated Review, allocated an extra £16.5 billion over four years.

This would be the biggest increase since the early 1950s, when concern that the Korean War might escalate to a wider war with the Soviet Union led to UK defence spending increasing from 6.6% of GDP in 1950 to 9.6% in 1952, before falling back to 5.9% by 1960.

The first indication of whether the new government is serious about the 3% target will come in the next Spending Review, likely to take place by November 2022.

For the 3% commitment to be credible, the Ministry of Defence (MoD) would expect to be compensated for the extra inflation since the 2021 Spending Review, and for planned real-terms cuts in the resource budget for the next two years to be reversed.

To ensure that the 60% increase in real-terms spending leads to a commensurate rise in military capability – and is not eaten up by increased inefficiencies – careful planning and preparation will be essential. This means investing in new industrial capacities capable of increasing production volumes, putting in place the process for building a larger service personnel workforce, and agreeing the additional physical infrastructure that a bigger force structure would require.

Given the immediate capacity constraints, the pace of spending growth is likely to be slower in the early years, before accelerating towards 2030. This could mean that defence spending rises from 2.2% of GDP in 2022/23 to 2.5% in 2026/27, before increasing to a full 3% over the following four years.