What does Defence Policy look like for the United Kingdom in 2025?
The United Kingdom’s defence policy in 2025 is shaped by the tension between its strategic ambitions within the ‘Coalition of the Willing’ and NATO, and the fiscal constraints it faces. Since Russia’s full-scale invasion of Ukraine in 2022, European states have accelerated efforts to rebuild military capacity, strengthen industrial resilience and coordinate procurement. The United Kingdom (UK) is one of Europe’s most capable military actors, with nuclear deterrence and highly regarded intelligence assets. Yet the structures in which European defence cooperation is now organised don’t include the UK as they once did. Exclusion from the European Union’s (EU) defence funding mechanisms, ambiguity in domestic defence budgeting and the increase in hybrid threats together expose a gap between the UK’s strategic role and its ability to shape the frameworks within which European defence is being reorganised.
This gap reflects not a withdrawal from European security, but a reconfiguration of how defence power is exercised and coordinated on the continent. Brexit did not remove the UK from Europe’s security environment, but it did alter the routes through which cooperation occurs. As a result, British defence policy operates in a landscape where NATO remains central, but where the EU has begun to play a more assertive role in defence-industrial coordination. Understanding the UK’s position requires understanding how these institutional changes interact with domestic fiscal politics in an increasingly threatening environment.
Defence Industrial Exclusion and European Rearmament
The EU’s recent push towards collective defence procurement marks a shift in European security governance. Initiatives such as the European Defence Fund and the proposed €150bn Security Action for Europe (SAFE) framework aim to address long-standing fragmentation in European defence markets by incentivising joint procurement and production within the EU (Fiott, 2024). These mechanisms are designed to strengthen European autonomy by anchoring defence supply chains inside the Union. As a non-member state, the UK is excluded from direct participation unless it negotiates bespoke agreements and makes financial contributions, which will be harder to obtain.
Research on defence economics consistently shows that collaborative procurement reduces duplication, lowers unit costs and enhances interoperability among allied forces (Hartley, 2018). The UK defence industry is deeply integrated into European supply chains, especially in aerospace, naval systems and advanced electronics. Exclusion from EU funding risks the development of parallel industrial systems across the Channel, increasing inefficiency and complicating future cooperation.
Budgetary Commitment and Strategic Credibility
Alongside exclusion from the EU’s defence policies sits uncertainty over domestic defence funding. The UK government has committed to increasing defence spending, with targets of 2.5 per cent of GDP and longer-term aspirations towards 3 per cent. However, credibility depends not on headline targets and sound-bites, but on multi-year programme commitments that enable sustained capability development. Chancellor Rachel Reeves’ most recent budget reaffirmed increasing defence spending to 2.6 per cent by 2027, and referred to the £10 billion frigate deal with Norway, but lacked specifics on procurement or programme spending, with the delays to the Defence Investment Plan (Financial Times, 2025a), highlighting the short-sightedness of the budget’s announcement.
This ambiguity has strategic consequences. Defence industries, both domestic and foreign, necessitate predictability to invest in production capacity and research. Allies assessing Britain as a partner in joint projects similarly seek assurance that commitments will endure beyond electoral cycles. A recent analysis in the Financial Times (Financial Times, 2025b), based on an EY Parthenon study, projects that the UK will need more than £800 billion of new funding by 2040 to meet defence and related security commitments, including capital projects that are not yet budgeted. This highlights the scale of the funding challenge and the risks to long-term defence planning without clear multi-year allocations. In this sense, fiscal opacity doesn’t just constrain domestic policy but feeds back into the UK’s diminished influence over Europe’s defence architecture.
Hybrid Warfare and the Changing Nature of Threat
The environment confronting the UK complicates this picture further. The nature of conflict has shifted, increasingly operating below the threshold of conventional war, combining cyber operations, disinformation, and covert sabotage. These methods are designed to exploit societal polarisation and critical infrastructure vulnerabilities rather than to achieve battlefield victory. Russia’s use of cyberattacks, information operations and energy leverage against European states shows this approach.
The UK is comparatively well-positioned in this aspect. Its intelligence capabilities, cyber institutions and experience in strategic communications give it a comparative advantage in countering hybrid threats. Studies of European security cooperation note that resilience against hybrid warfare depends as much on governance, regulation and public trust as on military power (Béraud-Sudreau and Scarazzato, 2021). Yet hybrid threats do not respect national borders. Effective mitigation, therefore, requires structured cooperation with European partners, particularly on information sharing, infrastructure protection and coordinated attribution. Distance from EU mechanisms risks limiting the UK’s ability to shape collective responses in precisely the domain where its expertise is strongest.
Britain’s Role in Europe’s Defence Landscape
These dynamics suggest that the UK’s role in European defence is neither marginal nor dominant but constrained. NATO remains the primary framework for collective defence, and Britain continues to play a central role in deterrence on NATO’s eastern flank within the ‘Coalition of the Willing’. However, as the EU expands its influence over defence-industrial coordination, the UK faces the risk of exclusion from EU-centred development, even as operational deployments remain united. The challenge for the UK is therefore one of alignment rather than reintegration, needing a defence policy that must reconcile NATO leadership with engagement in European industrial and resilience initiatives, supported by credible and transparent domestic funding. Without this, Britain risks occupying an increasingly narrow role, remaining a key military actor in operations but peripheral in shaping the structures that determine how European defence power is generated.
Recently, I had the honour of attending a recent Defence and Security Forum event, in which Retired Joint Forces Commander General Sir Richard Barrons argued the United Kingdom’s defence posture suffers not only from structural and fiscal constraints but from a complacency which fails to confront the prospect of failure. Barrons argued that decades of post‑Cold War peace have bred a “strategic decadence” whereby political and public discourse prioritises domestic welfare over defence investment, resulting in underfunded capabilities and a reluctance to make the hard choices necessary. Such warnings highlight the importance of planning for defeat or serious degradation of capability, reinforcing the gap noted in the introduction between the UK’s strategic ambitions in Europe and its ability to shape the frameworks through which defence power is exercised. Taken together, unless the UK aligns credible funding, industrial cooperation, NATO leadership, and anticipatory planning, its 2025 defence policy will remain operationally capable but strategically exposed, constrained in both influence and long-term resilience.
References:
- Béraud-Sudreau, L. and Scarazzato, L., 2023. Beyond Fragmentation? Mapping the European Defence Industry in an Era of Strategic Flux.CSDS In-depth, 7, p.2023. https://www.brussels-school.be/research/publications/beyond-fragmentation-mapping-european-defence-industry-era-strategic-flux
- Fiott, D. (2024)Beyond Strategy? Industrial Strategy and the Future of European Defence. Real Instituto Elcano. https://www.realinstitutoelcano.org/en/analyses/beyond-strategy-industrial-strategy-and-the-future-of-european-defence/
- Hartley, K. (2018) “The Economics of European Defence Industrial Policy,” in Karampekios, N., Oikonomou, I. & Carayannis, E.G. (eds.)The Emergence of EU Defence Research Policy: From Innovation to Militarization. Cham: Springer, pp. 77–92. DOI: 10.1007/978‑3‑319‑68807‑7_5. https://ideas.repec.org/h/spr/innchp/978-3-319-68807-7_5.html
- Financial Times (2025a) ‘Defence spending plan delayed over Starmer concerns’, Financial Times, 15 December 2025. https://www.ft.com/content/6e968ca4-51ad-4888-b198-82994953e8f8
- Financial Times (2025b) ‘UK needs £800bn of new funding by 2040 to meet defence pledge, says report’, Financial Times, 29 December 2025. https://www.ft.com/content/77380765-7212-45fd-b4ef-4ea7cb4baee2
