Rachel Reeves rejects calls to boost defence spending amid fears of £28bn shortfall

The department wants to increase its budget amid fears of a £28billion funding shortfall.

Talks over the defence budget have now hit a roadblock, the Telegraph reports, despite service chiefs warning that existing plans will not be enough to meet Britain’s spending commitments over the next four years.

It was reported this week that Downing Street wants to turbocharge its defence spend in the coming years, hitting three per cent by 2029, a claim sources later insisted was misinterpreted.

Defence officials are concerned about the possibility of a conflict with Russia in the coming years and feel rapid rearmament is crucial.

PA

Spending too much on procurement and inflation are key reasons as to why the MoD is facing a financial black hole of tens of billions of pounds, the department has argued.

Air Chief Marshal Sir Richard Knighton, chief of defence staff, is believed to have told the Prime Minister before Christmas about the shortfall.

The publication of the Defence Investment Plan (DIP) has been delayed as a result of the discussions, meaning Britain’s plans for how it will equip its military over the next decade remain unclear.

The Treasury is concerned about the MoD’s spending and its refusal to increase its budget beyond the settlement of £73.5billion a year by 2028-29.

Giving more money to defence could also mean Ms Reeves will have to carry out another tax raid in next year’s Budget.

According to the European Defence Agency, Britain currently commits 2.3 per cent of its share of GDP on military expenditure.

In terms of its share of Government spending, it stands at 5.3 per cent.

On Saturday, Sir Keir told Nato allies at a Munich summit that he wanted to ramp up the rearmament of Europe.

He argued: “To meet the wider threat, it’s clear that we are going to have to spend more, faster.”