Industry reacts to pre-Budget speech: Will defence spending take centre stage at the 2025 Budget?

Chancellor of the Exchequer, Rachel Reeves, delivered a pre-Budget speech on Tuesday, 4 November, outlying three core priorities: cutting NHS waiting times, reducing national debt, and improving the cost of living. However, defence spending also featured prominently in the discussion.

Reeves noted: “In an uncertain world, we also face pressure to increase our defence spending - and it is right that we do that, protecting ourselves from hostile actors and supporting our allies."

This message echoes commitments made in the October 2024 Budget and the Strategic Defence Review (SDR) published in June 2025, reaffirming the government’s stance that defence is a strategic priority for both national security and economic resilience. It signals a fundamental shift toward warfighting readiness, deterrence, and industrial resilience.

The SDR commits to increasing defence spending to 2.5% of GDP by 2027, supported by a £2.2 billion uplist to the Ministry of Defence (MoD) budget for 2025/26, announced in the Spring Statement 2025. The long-term ambition is to reach 3% in the next Parliament, a clear indication of the UK’s commitment to NATO and its role as a defence leader, exceeding NATO’s 2% spending guidance.

At Cundall, we understand the distinct operational and design requirements critical to the defence sector. The commitments outlined in the Strategic Defence Review and the Defence Industrial Strategy represent a once-in-a-generation opportunity to invest in national security. But success depends on setting a long-term plan and sticking to it. The upcoming Budget and the Defence Investment Plan will be key steps in defining that roadmap.

As the UK prepares for the 2025 Budget and the unveiling of the Defence Investment Plan, one message is clear: defence is no longer a peripheral concern but a central pillar of national strategy. Increased funding, a sharpened focus on industrial capability, and a long-term ambition to exceed NATO benchmarks position the UK to meet today’s threats and shape tomorrow’s security landscape.

The choices made now will define the nation’s defence posture for decades to come.