Conservative Party leader Kemi Badenoch has unveiled a major policy shift, pledging to create a £50 billion Sovereign Defence Fund by redirecting money from a key green investment initiative. The plan would see funds originally allocated for net zero projects under Labour's Ed Miliband repurposed to "rearm the UK" and accelerate war readiness.
From Green Investment to National Defence
Ms Badenoch accused the current Labour government of failing to adequately invest in the armed forces. She stated that the next Conservative government would move funding from what she termed "Ed Miliband's vanity Net Zero projects" to back the military. "Defence of the realm must be the first priority of any Government," she declared, highlighting growing global threats.
The central financial mechanism involves transforming the National Wealth Fund, currently dedicated to net zero projects, into a new National Defence and Resilience Bank. This new body would oversee the procurement of drones and other advanced technologies at a faster pace. An immediate £11 billion would be transferred from the National Wealth Fund to kickstart this initiative.
Funding the "Drone Revolution"
Shadow defence secretary James Cartlidge outlined how the money would be used, stating it would "deliver the drone revolution our armed forces require" and help create a more lethal military. A further £6 billion over three years would be drawn from the government's existing research and development budget and given directly to the Ministry of Defence for investment in new technology.
The Tories expect their Sovereign Defence Fund to mobilise the full £50 billion through a combination of this redirected public money and around £33 billion of investment from the private sector. The party emphasised that the funds would be invested in UK defence firms to build more resilient supply chains and reduce Britain's reliance on what it called "hostile states" such as China.
Mounting Pressure on Defence Spending
The announcement comes amid significant pressure on the government to increase defence investment. The Defence Select Committee has warned that Labour is moving at a "glacial pace" on war readiness. Furthermore, General Sir Gwyn Jenkins, the First Sea Lord, has called for an urgent spending increase as Russia continues to develop its naval capabilities.
Labour has previously pledged to raise defence spending to 2.5% of GDP from 2027, aiming for 3% by the end of the decade. However, the government is yet to publish a detailed plan on how it intends to meet the 3% target. A defence investment plan, due this autumn, has been delayed. Prime Minister Sir Keir Starmer told MPs the plan would be published "as soon as it's ready".
In a related development, negotiations for the UK to join the EU's 150 billion euro defence fund broke down last month over the financial contribution required. Earlier this year, the government did launch UK Defence Innovation with a £400 million annual budget aimed at bringing new technology to the military.
