Defence spend in Budget must rise, Shapps told Hunt

GRANT SHAPPS is demanding that Jeremy Hunt raise defence spending to 2.5 per cent of GDP in the Budget amid growing threats to Britain, The Telegraph can reveal.

The Defence Secretary sent a letter to the Chancellor formally making the request on Jan 24 in which he warned that the UK needed to “re-establish our leadership in Europe”.

The Cabinet split piles further pressure on Mr Hunt, who is already facing a Tory backlash after this newspaper reported that no new money is set to be announced for the Ministry of Defence [MoD] in Wednesday’s Budget. Increasing next year’s defence spending to 2.5 per cent of GDP would cost about £9 billion, according to a security think tank. It currently stands at about 2.2 per cent.

Mr Shapps is understood to have written in the letter to Mr Hunt: “I believe we must take bold action in your Budget in March to commit to defence spending increasing to 2.5 per cent in 2024. This will resonate with our allies and adversaries. It would reestablish our leadership in Europe.”

Another section read: “I recognise this may mean hard choices elsewhere, but we should seek to reap the benefits of your successful management of inflation and the economy.”

Mr Shapps continued: “The threats we are facing are growing and so defence spending is only going to go one way. We should seize the initiative for your Budget.”

His warning that the UK needs to reestablish its leadership in Europe has emerged in the week that Emmanuel Macron, the French president, attempted to position himself as Ukraine’s champion, floating the idea of sending troops to the country.

The idea was dismissed by Nato allies. London and Washington have offered significant support to Kyiv since the start of the war, while French pledges of financial and military support have been among the lowest in Europe.

Germany has increased defence spending since Russia invaded Ukraine, but yesterday Berlin ruled out sending powerful Taurus missiles to Ukraine amid fears that they could be used to strike Moscow.

Mr Shapps’s words also suggest that he believes Britain will be less well prepared to counter the threats it faces if defence spending does not rise.

A Treasury source said: “A strong Armed Forces requires a strong economy. We need to focus on economic growth so we can raise living standards and raise the revenue necessary to invest in our defence.”

Economic forecasts, which Treasury insiders say have left the Chancellor with less money to play with for the Budget on March 6, mean less generous public spending plans than were once under consideration are expected to be unveiled.

Mr Hunt is also understood to have been forced to abandon plans for a package of support for first-time buyers, including a shake-up of the Lifetime ISA savings product to reflect the rise in house prices and offering government-backed 99 per cent mortgages.