Finance
Britain unveils radical defence overhaul to meet new threats
Published by Global Banking & Finance Review®
Posted on June 1, 2025
4 min readLast updated: January 23, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on June 1, 2025
4 min readLast updated: January 23, 2026
Britain announces a major defence strategy overhaul, focusing on technology and drones to address threats from Russia and cyber-attacks.
By Elizabeth Piper and Sam Tabahriti
LONDON (Reuters) -Britain said on Monday it would radically change its approach to defence to address threats from Russia, nuclear risks and cyber-attacks by investing in drones and digital warfare rather than relying on a much larger army to engage in modern combat.
Responding to U.S. President Donald Trump's insistence that Europe take more responsibility for its own security, Prime Minister Keir Starmer has pledged the largest sustained increase to UK defence spending since the end of the Cold War.
But with limited finances, the government's plan envisages making the army more lethal, not larger, by learning from Ukraine where drones and technology have transformed the battlefield.
Defence Secretary John Healey said Britain's adversaries were working more in alliance and technology was changing how war was fought: "Drones now kill more people than traditional artillery in the war in Ukraine and whoever gets new technology into the hands of their armed forces the quickest will win."
Starmer commissioned a Strategic Defence Review shortly after he was elected last July, tasking experts including the former NATO boss, George Robertson, and a former Russia adviser to the White House, Fiona Hill, with formulating a plan for the next 10 years.
Despite cuts to the military budget in recent years, Britain still ranks alongside France as one of Europe's leading military powers, with its army helping to protect NATO's eastern flank and its navy maintaining a presence in the Indo-Pacific.
But the army, with 70,860 full-time trained soldiers, is the smallest since the Napoleonic era and the government has said it needs to be reformed given the growing strategic threats.
NEW DEFENCE AGE
Under the plan accepted by the government, Britain will expand its fleet of attack submarines which are nuclear-powered but carry conventional weapons, and will spend 15 billion pounds ($20.3 billion) before the next election due in 2029 on the replacement of the nuclear warheads for its main nuclear fleet.
It will build at least six new munitions plants, procure up to 7,000 British-made long-range weapons, and launch new communication systems for the battlefield.
A Cyber and Electromagnetic Command will lead defensive and offensive cyber capabilities, after UK military networks faced more than 90,000 "sub-threshold" attacks in the last two years.
But on the size of the armed forces, the review said it would not reduce numbers, even as a greater emphasis is put on technology, but increasing the total number of regular personnel should be prioritised when funding allows, likely after 2029.
"The moment has arrived to transform how we defend ourselves," Starmer told workers at BAE Systems' Govan shipbuilding site in Scotland, saying he would "end the hollowing out of our armed forces".
"When we are being directly threatened by states with advanced military forces, the most effective way to deter them is to be ready."
Starmer has already said defence spending will increase to 2.5% of GDP by 2027, from 2.3%, but critics and political opponents urged the government to put a date on when it would move to 3% of GDP.
Reuters has previously reported that NATO Secretary General Mark Rutte wants members to raise defence spending to 3.5% of their GDP, and a further 1.5% on broader security-related items to meet Trump's demand for a 5% target.
Starmer said he was "100% confident" that UK defence spending would hit 3% in the next parliament likely between 2029-2034 - something the review appeared to take into account when drafting its recommendations.
The government described its policy as "NATO first", drawing on the strength of the alliance's members which meant it would never fight alone.
Starmer has sought to cast the higher defence spending as a way to create jobs and wealth, as he juggles severely strained public finances, a slow-growing economy and declining popularity among an increasingly dissatisfied electorate.
The announcement about new submarines helped lift the share prices of defence groups Babcock, BAE and Rolls Royce.
($1 = 0.7386 pounds)
(Writing by Kate Holton; additional reporting by William James; Editing by David Holmes, Bernadette Baum, William Maclean)
Britain plans to radically change its defence strategy by investing in drones and digital warfare to address threats from Russia, nuclear risks, and cyber-attacks.
Defence spending is set to increase to 2.5% of GDP by 2027, with expectations to reach 3% in the next parliament, likely between 2029-2034.
The UK will expand its fleet of attack submarines, build new munitions plants, and enhance cyber capabilities to address modern warfare challenges.
The Strategic Defence Review, commissioned by Prime Minister Starmer, aims to reform the military in response to growing strategic threats and to ensure the armed forces are adequately prepared.
The government believes that being ready and technologically advanced is the most effective way to deter states with advanced military forces.
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