Streeting has ‘total confidence’ UK will hit defense spending target

BERLIN — Britain has set a 2030 deadline for raising defense spending to 3% of GDP. Finding the money — and getting industry to deliver — will be the harder tests, U.K. Defence Secretary Wes Streeting told POLITICO. U.K. Chancellor John Healey announced the target during last week’s budget, but faced criticism for not laying out how it would be funded. The government will set out next year how it plans to meet the 3% target by 2030 and its NATO commitment to spend 3.5% of GDP on defense by 2035.

On a Monday visit to Brussels and Berlin, Streeting said he has “total confidence” that the U.K. will hit the 2030 goal, adding: “We deliver on time and on target.” The U.K. currently spends about 2.6% of GDP on defense. However, the defense budget has been bolstered in a bid to deter Russia, while other departments face cuts. “I think I was probably the only Cabinet minister going into the budget who was in a position to confidently say that we’d be getting more,” Streeting said of last week’s announcement.

He said the commitment to higher spending “was an important message to send to industry and our allies, and our adversaries for that matter.” He also rejected accusations that the government has not laid out a clear path for higher spending. The Institute for Fiscal Studies said that hitting the 2030 defense spending target would need an additional £11 billion in spending, and reaching the 2035 NATO goal “would require an even larger, and more sustained, increase.”

In last week’s announcement, the Treasury also established an Innovative Defence Financing Taskforce aimed at “maximising the contribution of private and international finance to UK defense.” The idea is to figure out how to channel more private sector funds into defense, including with public-private partnerships. However, Streeting said he was wary of defense turning to Private Finance Initiatives. Under PFI, private consortia design, build and maintain public infrastructure — such as schools, hospitals and roads — in exchange for decades of taxpayer-funded lease and service payments.

“I’m a big critic of PFI,” said Streeting, noting that Britain “learned the lessons on PFI a long time ago and so the private finance initiative is not something we would repeat.” “But there are other ways of drawing in private finance which learn the right lessons and get a good return and good deal for everyone, and pass without controversy,” he added. The defense buildup involves tighter cooperation with industry and also closer links with key allies like Germany.

Streeting met with German Defense Minister Boris Pistorius in Berlin to discuss the two countries’ defense partnership. That included discussions on Germany potentially joining the British-Italian-Japanese Global Combat Air Programme to build sixth-generation fighter jets. Germany has been casting about for a way to build advanced combat jets after its joint efforts with France collapsed earlier this year . One option is to forge closer ties with GCAP, but some of the three existing members, including Japan, are worried that bringing in Germany could delay the project, which aims to bring the aircraft into service by 2035.

There is also concern that adding another member would dilute the amount of work being done by companies from the three original countries, something Streeting said he was aware of. German officials also worry that Germany would have too little influence over a program that is already underway. Streeting stressed that allowing in new GCAP members would have to be a “shared decision” with Italy and Japan, adding he was conscious of “some of the risks around timescales for delivery.”

Asked about potential delays to GCAP, Streeting said: “One of the things I’m keen to do is to try and accelerate the program and look right across the program delivery timetable which bits we can try and truncate.” He added that the long development time for the GCAP project exemplified frustrations with the defense industry across a range of other programs that are “shared by defense ministers across NATO.” The European defense industry is pressing for governments to issue long-term contracts, which would lower the risk they face in making large investments to set up new production.

“I think it reflects a legitimate peacetime business as usual, where industry leaders are keen to avoid famine and feasts. They want to sustain their production lines,” Streeting said, but added that companies therefore “do not go as fast or as productively as they possibly could.” But the need to deter Russia and to continue supporting Ukraine means that caution should be jettisoned, he said. “We are in a place of heightening threat, and so as the U.K. and our NATO allies are spending more and investing more in our capability, we need industry to step up and accelerate as well with us.”