Under the current Labour government, we have been frequently reminded of the Tory legacy: a £22 billion hole in the public finances. The fiscal situation has led to a plethora of departmental cuts, with the most recent wave announced in the Spring Statement.
Against this backdrop, the significant increase in defence spending is striking. This wasn’t an obvious move — so why did an increased defence budget emerge as a priority for the public purse?
The Chancellor announced that defence expenditure will rise from its current level of 2.3% of GDP to 2.5% by 2027, with an aspirational target of 3% in the following Parliament (2029–2034). While the latter goal lacks a firm deadline, the ambition itself sends a clear signal: this government views the UK defence industry not only as a matter of national security but as a potential engine for economic growth.
Taking national security first: the recent global geopolitical instability — sparked by Trump tariffs and the broader unpredictability of his presidency — has intensified the UK’s strategic need to reduce reliance on US defence procurement. In response, the UK is seeking both to ramp up domestic capability and to deepen collaboration with its European allies.
To this end, Starmer is aiming to sign a defence and security pact at a summit of EU leaders, hosted by the UK, in May — the first of its kind since Brexit. A new defence deal could pave the way for the UK to access greater R&D and participate in the EU defence procurement fund, which allows member states to take out loans or purchase up to €150 billion of air and missile defence systems, ammunition, drones and other military equipment.
While defence and security cooperation will dominate the upcoming UK-EU Summit, the summit’s outcome hinges on wider negotiations, with all 27 EU member states needing to sign off on a defence proposal. Other agreements covering emission trading, migration and food standards are likely to be discussed. But most recently, fish — and access to them — have been a key point of contention.
With the existing post-Brexit fisheries agreement set to expire in 2026, France, Denmark, and other coastal EU states are eager to retain access to UK waters. They’ve made it clear that progress on defence cooperation may be contingent on a satisfactory outcome regarding fishing rights.
Over the weekend, it was reported that Britain may yield to European demands for post-Brexit fishing rights at the expense of British fishermen — despite Fisheries Minister, Daniel Zeichner, previously telling the EFRA Committee there was “no linkage” between issues.
While defence and fishing deals rarely sail in the same boat, the reality of multilateral diplomacy often demands unlikely pairings. The total value of British defence exports in 2023 was £14.5 billion — compared with £1.7 billion in fish sales — pointing to Starmer’s hardline priorities going into the May negotiations: growth-aligned industries, with bonus points for those sectors also delivering on other Labour missions.
As the first EU-UK summit gets underway next month, the shape of these negotiations — and the industries they affect — will begin to take form. But for now, the finer details remain elusive, especially for the diverse sectors hoping to reel in a seat at the table. To remain competitive when talking to government, businesses must align their political objectives with multiple government priorities, especially growth, or may be left swimming upstream.
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At Whitehouse Communications, we are experts in helping businesses shape their messaging to speak to the priorities of government and cut through the noise. If you want to discuss how we might be able to help your business or organisation shape the government agenda, get in touch via info@whitehousecomms.com.
